FHA mortgage apps spike ahead of new regs

Mortgage loan applications for purchases climbed 9.3 percent last week to their highest level since early May, according to a new survey from the Mortgage Bankers Association, released today.

According to the trade group, the week-over-week increase was bolstered by a 17.2 percent spike in applications for mortgages from the Federal Housing Administration; meanwhile, conventional purchase applications were up 3.6 percent. Refinancing applications declined by 2.5 percent during the same time period.

“This is the second straight weekly increase in purchase applications
and the highest Purchase Index level since the expiration of the
homebuyer tax credit program,” said Jay Brinkmann, chief economist for the MBA. “One possible driver of last week’s big
increase in FHA applications was a desire by borrowers to get
applications in before new FHA requirements took effect Oct. 4,
which included somewhat higher credit score and down payment
requirements.”

Still-declining interest rates may have also contributed to the uptick, as the 30-year fixed-rate mortgage saw its average contract interest rate fall to a record low 4.25 percent from 4.38 percent one week earlier. The 15-year mortgage also hit a record low of 3.73 percent, down from 3.77 percent one week earlier. TRD