Applications for first-time homebuyers are on the rise, according to a new real estate market report.
The Mortgage Bankers Association released statistics covering the last few weeks and found that the volume of mortgage applications fell slightly overall, driven by a reduction in home mortgage refinancing.
It turns out that eligible homeowners who would reap the most benefits from a refinance are decreasing in number.
Home purchases are down as well, but not by much. The number of purchases decreased by about 1% week over week. Meanwhile, FHA loan applications jumped to 9.4%, up a full half percentage point from the previous week.
As a government-backed program, FHA loans are hugely popular with first-time homebuyers. More on that below.
In contrast to the first-time homebuyer trend, the number of homeowners who applied for a refinance fell by 5% over the same reporting period. A slight increase to the mortgage rate is also behind the decrease to this mortgage application category.
Today’s competitive market, which features rising home prices, is not getting in the way of the first-time homebuyer. Increasingly, they are relying on an FHA loan, which makes buying a home more affordable and accessible.
With an FHA loan, applicants enjoy far more lenient borrowing requirements. In many cases, the loans offer low down payments, flexible income requirements and credit score expectations that aren’t impossible to reach.
These buyer-friendly loan programs are backed by the Federal Housing Administration. This extra protection allows banks to take on more borrowers without taking on greater risk.
To learn more about how you can qualify for an FHA loan and join a growing number of first-time homebuyers, reach out to us today for details.
PMR is not affiliated with or an agency of the federal government.