U.S. home mortgage applications fall almost 19% in June 2009

July 1, 2009 by · Leave a Comment
Filed under: Real Estate News 

With interest rates creeping back up to previous levels, it is no surprise that refinance activity has slowed considerably as of late.  In the article they state the the “5%” level is where the rates need to be for the market to maintain the activity that began when the government started aggressively pushing interest rates down to try and decrease the amount of defaults and foreclosure that have been associated with these sub-prime and Alt-A loans resetting to higher rates that are tied to the LIBOR or 10-year treasury bond.

News (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 Nov. 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.

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