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cbr600f4i2
Posts:478
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| 07/01/2009 5:11 PM |
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NEW YORK (Reuters) - U.S. mortgage applications plunged to a seven-month low last week as demand for home refinancing loans tumbled 30 percent, data from an industry group showed on Wednesday.
The drop does not bode well for the hard-hit U.S. housing market, which has been showing some signs of stabilization, with sales rising and home price declines moderating in many regions of the country.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended June 26 decreased 18.9 percent to 444.8, the lowest reading since the week ended November 21, 2008.
Kenneth Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley, said mortgage rates are just one factor driving potential borrowers.
"Rising unemployment, concerns about job security, potential buyers' inability to sell their existing homes and problems with appraisals coming in too low are all weighing on demand," he said.
"The government needs to take more aggressive action to bring mortgage rates back down to below 5 percent as that seems to be a key level for the market," he said.
WEEKLY REFINANCING ACTIVITY PLUNGES
The index of refinancing applications decreased 30.0 percent to 1,482.2, also the lowest since the week ended November 21 but up 16.8 percent from a year ago. The four-week moving average was down 15.2 percent.
Refinancing activity pales in comparison to where it was at the start of the year. Refinancings accounted for 46.4 percent of applications, down from 54.0 percent the previous week and significantly lower than the peak of 85.3 percent in the week ended January 9.
The U.S. housing market is in the worst downturn since the Great Depression and its impact has rippled through the recession-hit economy, as well as the rest of the world. Economists contend that the economy might not emerge from its slump unless the housing market stabilizes.
The shares adjustable-rate mortgage activity increased to 4.3 percent in the latest week, up from 4.1 percent the previous week.
http://finance.yahoo.com/news/US-mortgage-applications-fall-rb-4099573864.html?x=0&.v=3 |
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stella
Posts:503
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| 07/01/2009 5:36 PM |
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| I wonder how much of this relates to low inventory and a general depletion of good refinance candidates? At some point with rates low everyone that can refi will have done so. |
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FSD
Posts:283
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| 07/01/2009 5:53 PM |
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Not a surprise on the refinances, since interest rates have moved up lately, but ...
Q. What's missing ?
A. Reuters dropped the explicit mention of the change in the index for new loans (as opposed to refinances), that was in MBAA's press release.
For those who are curious ... Applications for new loans decreased 4.5% on a weekly basis.
This index is quite noisy as the moves in the past few weeks have been + 7.3%, -4.5%, +7.3%, -3.5%, +1.1%
http://www.mbaa.org/NewsandMedia/PressCenter/69498.htm
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