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The government-insured share compared to 25.7 percent a month earlier and 27.0 percent in June 2008. The last time the government-insured rate was this high was November 1990; the highest percentage on record was 43.8 percent in February 1990; the lowest recorded share was 5.8 percent in August 2005 (MBA began recording such rates in January 1990).

The government-insured share of purchase applications in June reached 38.6 percent, up from 27.8 percent one year ago. The government-insured share of purchase applications has averaged 36.6 percent to date in 2009, compared to an average of 21.8 percent during the same period in 2008.The low point was August 2005 (6.8 percent).

"A primary reason government-insured loans have retained a high share of the purchase market is that these loans typically require lower down payments than conventional loans," said MBA Associate Vice President of Economic Forecasting Orawin Velz. "In addition, lending standards tend to be tighter for conventional loans, especially for loans that require private mortgage insurance."

While the government-insured share of purchase applications has remained elevated, the government-insured share of refinance applications has been volatile, Velz noted. The share hit a record high 38.4 percent in October 2008.

"As mortgage rates fell sharply between mid-November through early May, refinance activity surged for conventional loans," Velz said. "This surge in conventional refinance applications dominated the market, causing the share of FHA refinance applications to fall below 20 percent for most of this year. Recent increases in mortgage rates have caused conventional refinance activity to drop much more sharply than government-insured refinance activity due to a combination of credit and LTV requirements. As a result, the government-insured share of refinance applications climbed to 33.6 percent in June."