A plunge in applications for government-insured loans was behind a drop in overall mortgage volume last week.
Total mortgage applications fell 3.2 percent on a seasonally adjusted basis from the previous week, according to the Mortgage Bankers Association. Volume was 18 percent lower than the same week one year ago.
Most notable was a 13 percent drop in FHA applications — a direct result of the Trump administration reversing a cut in the FHA's annual mortgage insurance premium just hours after the inauguration. That cut was the last major policy act of the Obama administration and would have decreased monthly payments for thousands of new, lower-income borrowers. FHA applications increased immediately after the cut was announced, and lenders have reported that many of those have also been withdrawn.