Is government about to make the mortgage market even worse?
Today's weekly mortgage applications survey from the Mortgage Bankers Association seemed to offer a small glimmer of hope. Government purchase applications have been driving the market for the past year, accounting for, at times, nearly half of all new loans. Yes, refinancings—which have been running at around 80 percent of all mortgage applications—fell despite a new record low average rate on the 30-year fixed of 4.38 percent. Not so good. But on the other hand, purchase applications rose 2.4 percent, largely driven by a 4.5 percent increase in government purchase applications (FHA). Great, except for that last part.