Despite all the mortgage insurance premium hikes, homebuyers are still taking out Federal Housing Administration loans.
A new report shows FHA lenders originated $51.8 billion in purchase mortgage loans during the first four months (October - January) of fiscal year 2013, compared to $39.5 billion during the same four-month period in FY 2012.
Despite the 30% increase in the dollar amount of the loans, the number of loans was flat. FHA-insured purchase loans totaled 238,820 during the first four months of FY 2013, compared to 237,880 during the same period in FY 2012.
The dollar amount increase could reflect rising house prices and purchases of higher-end homes.
FHA has been raising its premiums for the past two years and borrowers now pay upfront premiums of 175 basis points along with an annual premium 125 bps on a standard FHA-insured loan with a principal amount of less than $625,500.
On April 1, the annual premium is slated to go up by 10 bps.
In January, originations of
