In what should come as no surprise to anyone who has been paying attention, mortgage applications dropped again last week. Today the Mortgage Bankers Association released the Weekly Mortgage Applications Survey for the week ending June 18th. The study found that total mortgage activity is down nearly 6 percent from the previous week.
Seasonally adjusted refinance activity is down 7.3 percent from the previous week, and seasonally adjusted purchase applications are down 1.2 percent from the previous week. Purchase activity is down almost 37 percent from the same time last year, and is currently at a 13 year low point. Refinance applications made up 73.8 percent of total mortgage activity, a slight decline from last week.
According to the report, the average mortgage rate on a 30-year fixed-rate mortgage fell 7 basis points to 4.75 percent. Historically low mortgage rates are helping to keep mortgage activity from collapsing across the board, as homeowners continue to refinance their mortgages, sometimes saving hundreds of dollars per month in mortgage payments.
Mortgage applications have decreased every week since the expiration of the $8,000 first time home buyer tax credit on April 30th. It is becoming apparent that the tax credit accelerated sales from the summer and fall into the spring, causing mortgage activity to plummet in its wake.
None of this news bodes particularly well for the housing market or the broader economy. It will be very interesting to see what the government reaction will be if this trend of dismal housing numbers continues.
What do you think will happen to the housing market? Let us know in the comments section below.
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