Home mortgage applications hit 8-year low on par with year 2000

October 22, 2008 by · Leave a Comment
Filed under: Real Estate News 

No surprise here, you need ‘real’ growth and income to create demand for additional housing unless your going to just give it away.  We need to quit this excessive liquidity in the markets and let companies and asset classes fall so we can restore confidence and soundness in our monetary policy.  I am not a fan of using interest rates to control the supply of money, either.  Mortgage rates are still skyhigh so people do not want to buy a home even if, they were a sound borrower.  The system is starting to fall apart and I hope everyone is being prudent and taking care of themselves.  

Press Piece:

Demand for applications to buy U.S. homes and refinance mortgages sank to the lowest level in nearly eight years, a trade group said on Wednesday, in the heart of a financial crisis that has sapped consumer confidence.

The Mortgage Bankers Association’s seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, slid 16.6 percent to 408.1 last week, the lowest reading since December 2000.

 

Potential buyers are in many cases paralyzed by tumbling stocks, a two-year home price slump that has room to run, mortgage rates close to the year’s peak and higher downpayments required by lenders making it harder to get a mortgage as foreclosures spike.

 

Job insecurity is also increasing as a recessionary economy means unemployment will rise from its five-year high, many analysts say.

 

“A lot of individuals are just not thinking about buying a house now,” said Stuart Hoffman, chief economist at PNC Financial Services Group in Pittsburgh. “They’re uncertain, their confidence isn’t high, they’re feeling that they might not qualify for a loan anyway so why even bother to apply.”

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