The refinancing boom for FHA lenders came to an end in July as loan production fell and purchase mortgage lending comprised over 60% of originations for the first time this year.
The Federal Housing Administration reported the July single-family endorsements totaled nearly 106,000 and 63% were purchase mortgage loans and 37% were refinancings.
Over the first three quarters of fiscal year 2013, refinancings averaged over 50%. But in June, refinancings fell to 45%.
The decline is partially due to the spike in interest rates this summer. But in early June, FHA implemented a new policy with regard to its annual insurance premium, currently 135 basis points. This annual
Refinancings dropped to 39,400 in July from 50,240 in June. Purchase mortgage lending picked up nearly 8% from June to July as homebuyers took out 66,555 FHA-insured loans.
Overall, FHA single-family originations fell 5% in July from the prior month.
