FHA loan activity rose to a two year high in the second quarter this year. FHA loans typically have very low down payments, designed for first time homebuyers looking to get into home ownership but may not have the capital to do so. Having FHA loan activity rise implies that these buyers are now feeling financially stable enough in a growing economy to take the plunge—great news for housing and the overall United States economy.
Buyers using FHA loans made up 23% of all home and condo sales that were financed. That figure is up 19% from FHA activity in 2014 and is the highest share of the market since the first quarter of 2013. In general, a strengthening economy and job market probably most effected the increase in activity. At the beginning of the year, the FHA lowered their mortgage insurance rates, which may have also helped provided more benefits and more activity. Mortgage activity across the board has been rising. Having high mortgage activity will help deepen and strengthen the overall housing market.
In similar news, mortgage rates did inch a few ticks higher this week. Mortgage rates went up for the first time in 4 weeks, but still remain very low. The 30 year fixed rate averaged 3.94%, up from 3.91% last week and below the 4.04% seen in July. Rates are expected to go up when the Fed raises their own interest rates, but when that will occur is yet to be seen.