Both applications for FHA-guaranteed mortgages and FHA endorsements were lower in January than in the previous month or in January 2010. Lower demand was reflected across all subsets, purchases, refinances and mortgages for first-time buyers.
Applications for FHA mortgages totaled 103,991 in January compared to 112,500 in December and 126,043 a year earlier. The year-over-year figure reflects a drop of 17.5 percent. There were 55,417 applications for mortgages to purchase homes and 41,178 to refinance. This was a 3.4 percent decrease in purchase applications since December and a 21.6 percent change from January 2010. Applications to refinance were down 12.1 percent quarter-to-quarter and 16.9 percent over the longer period.
FHA took an average of 5,735 applications per day in January. The average processing time from application to closing was 8.1 weeks, up from 7.6 in December but about the same as a year earlier and 4.0 weeks from closing to endorsement, 1.3 week less than a year ago.
Declining loan demand in January is no surprise given the uptick in mortgage rates we witnessed. Rates are now off those highs but loan production has yet to pickup. We are curious to see how the FHA's decision to raise the annual mortgage insurance premium will impact loan demand before the new fee structure goes into effect on April 18th.
Perhaps buyers will rush to beat the deadline?
...(read more)
Source: http://www.mortgagenewsdaily.com/02242011_fha_volume.asp
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