Currently Reading

First-Time Buyers May Pull Back as FHA Rates Rise, Mortgage Demand Drops Slightly


First-Time Buyers May Pull Back as FHA Rates Rise, Mortgage Demand Drops Slightly

July 29, 2020
Aerial view of suburban neighborhood
By Jandrie Lombard

Mortgage interest rates remain historically low, and demand remains high, but slight dips in mortgage applications to purchase a home may show a change in first-time buyer demand. Total mortgage application volume fell by 0.8% last week compared to the previous week, and mortgage applications were 2% lower, according to CNBC. This could be a result of the increasing average rate for FHA-backed 30-year fixed-rate mortgages, which grew by 0.14%. CNBC says these federally backed loans are most popular with first-time buyers because of the lower down payments required. Buyers with FHA loans made up 35% of closings in June—will the increasing rates threaten the housing market’s recovery?

Mortgage applications to purchase a home were 2% lower last week than the previous week but a strong 21% higher annually. Homebuyers are making up for lost time last spring and appear to have a new urgency to move due to the Covid-19 pandemic. Buyer demand for new construction is especially strong, as the supply of existing homes for sale continues to shrink.

Applications to refinance a home loan were basically flat, falling 0.4% for the week but were 121% higher than a year ago. Refinance demand has been riding high because mortgage rates keep falling. Even small rate moves open the field to more borrowers who can benefit and save much-needed cash on their monthly payments. 

Read More

Related Stories

Market Data + Trends

Case-Shiller: September Home Prices Break 6-Year High warns that prospective homebuyers may not find a better deal in the future as home prices continue their climb. According to the S…


As Mortgage Rates Lower, Millions of Americans Can Save Big

With mortgage rates down to a new low, a record 19.4 million Americans could save hundreds per month. The average interest rate for Freddie Mac’s…

Market Data + Trends

Mortgage Demand Increases for First Time This Month

After a brief pause for the presidential election, mortgage applications are now back to booming. For the week, mortgage applications to purchase…


More in Category


Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.

Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.