The Mortgage Bankers Association has come out with a new study which speaks loudly about FHA home loans. FHA loan activity has risen significantly with average loan amount sizes increasing as well. The 2008 MBA Cost Study indicates that average FHA loans originated five years ago have were $162,454 loan amounts and they increased to $195,227 in 2007.
According to economist Jared Bernstein from 2000 to 2007 household income has actually dropped by $324 when factoring in buying power. FHA mortgage refinance activity continues to dominate the loan application volumes. According to MBA, in June 2003 a standard thirty year fixed rate mortgage loan could be locked at 5.21% plus .5 points. The mortgage rates rose, but not by much. According to Freddie Mac as of the start of October rates for fixed-rate conventional home loans stood at 6.10% plus .6 points.
The MBA study examined FHA mortgage loans and their share of the home loan market: Based on dollar amount, FHA home loans accounted for 5.8% of the market in 2003 Mortgage brokers and lenders are reporting significant increases in originating with FHA loans, so when the 2008 numbers are released, most industry insiders anticipate a giant leap in the share of the home financing sector. According to Corey Galinsky a branch manager with Community First Bank, “FHA is the best loan option for home buying and FHA is the only option for borrowers with little equity for refinancing.”
