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| The share of mortgage applications that were for loans either insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs has risen to the highest level since 1990.
Government applications accounted for 36 percent of all 1003s tracked by the Mortgage Bankers Association during June, a news release today said. Government activity jumped from 26 percent in May and 27 percent in June 2008. The Washington, D.C.-based trade group indicated that June’s government share was the highest since November 1990. Looking at just purchase applications, the government share was 39 percent. “A primary reason government-insured loans have retained a high share of the purchase market is that these loans typically require lower down payments than conventional loans,” MBA Associate Vice President of Economic Forecasting Orawin Velz explained in the report. “In addition, lending standards tend to be tighter for conventional loans, especially for loans that require private mortgage insurance.” The government share of refinances has been more volatile, dropping from a record 38 percent in October 2008 to below 20 percent for most of this year as conventional refinances surged. But in June, falling conventional refinances pushed government refinance share up to 34 percent. |
