Mortgage applications fell last week as demand waned because of higher insurance premiums for government-backed loans, according to a leading trade association. The Mortgage Bankers Association said its market composite index declined 5.6% on a seasonally adjusted basis for the week ended April 22. The MBA made no adjustment to account for Good Friday, when markets were closed. On an unadjusted basis, the index also decreased 5.6% last week. The seasonally adjusted refinance index slid just 0.6%, but the purchase index fell 13.6% to the lowest level in two months. Government purchase applications declined 26.6% last week, according to MBA. “Purchase applications fell last week, driven primarily by a sharp decrease in government purchase applications as new, higher FHA premiums went into effect,” said Michael Fratantoni, MBA vice president of research and economics. “This decrease reverses a 20% increase in government purchase applications over a four-week period, which was likely driven by borrowers attempting to beat this deadline.” In February, the Federal Housing Administration announced plans to raise the annual mortgage insurance premium by 0.25% on all 15-year and 30-year mortgages it backs. The agency was responding to a congressional mandate to keep its insurance fund liquid. The MBA said the unadjusted purchase index decreased 12.8% last week and is nearly 30% lower than a year earlier. In four-week moving averages, the market index is down 2.4%, with the purchase index off 0.8% and the refinance index down 3.2%. Refinancings accounted for 61.6% of all mortgage applications last week up from 58.5% the previous week and at the highest level in a month. The MBA said the average interest rate for a 30-year fixed mortgage inched down to 4.8% last week from 4.83% the prior week. The average rate for a 15-year fixed mortgage also fell slightly to 4.03% from 4.07%. Write to Jason Philyaw.

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