Originations of FHA-insured purchase money loans have slid nearly 10% compared to a year ago, according to new figures compiled by the Federal Housing Administration.
FHA lenders originated $78.2 billion of purchase mortgages during the first eight months of the current fiscal year, down from $86.3 billion during the same period in FY 2011.
In May, FHA endorsed $11.3 billion of purchases, up 14% from the month prior.
But that could be a temporary bump. On April 9, FHA officially raised its annual premium by 10 basis points and its upfront fee by 75 bps. That means borrowers have to pay a 175 bp upfront fee and a 125 bp annual premium on loans with a LTV ratio greater than 95%.
Purchase mortgage applications surged in March as 118,000 potential homebuyers applied for a FHA-insured loan to beat the premium hike.
Applications fell 25% from March to 88,100 in April. The new May report shows applications dropped 6% to 82,700, which is down nearly 18% from May 2011.
Meanwhile, FHA endorsed $8.9 billion of refinancings in May, down 4% from the month prior.
