Justin Perry's Mortgage Blog

Demand for prime and fixed-rate mortgages increased during the second half of 2007, according to a report released today by the Mortgage Bankers Association.

Fixed-rate loans accounted for 63.6 percent of all first mortgages in the last six months of 2007, compared to just 53.4 percent during the first half of the year.

And 79 percent of all origination dollars were for prime loans, up from 70 percent in the first half of 2007, while 7.5 percent were non-prime (10.4 percent in 1st half) and 7.8 percent were Alt-A (15.8 percent in 1st half).

The MBA attributed the increased popularity of fixed-rate mortgages to a significant decline in long term interest rates, a tighter spread between ARM and fixed rates, and the slowing of subprime lending, which is often accompanied with an adjustable-rate.

Government-insured FHA and VA loans also saw an increase in market share, accounting for 5.7 percent of all origination dollars, up from 3.8 percent six months earlier.

This really should come as no surprise to anyone.  Personally the only number that stands out to me is the percentage of FHA and VA loans originated in that period.   FHA and VA loans account for nearly 20% of the loans we do here at Mortgage Master Inc.  I just hope that the almost 20% of people who did not receive prime loans were at least offered an FHA or a VA loan.