Today the Mortgage Bankers Association released its Weekly Mortgage Applications Survey for the previous week. The total measure of mortgage activity increased 8.8 percent from the previous week, as refinance applications increased 12.6 percent from the week prior. The purchase index decreased 3.8 percent from the previous week.
Michael Fratantoni, the MBA’s Vice President of Research said: “Amid continuing financial market volatility, mortgage rates dropped again last week, with rates on 15-year loans reaching a record low for the MBA survey. Refinance applications jumped in response, but remain at about half the level seen in the spring of 2009. Purchase applications declined for the seventh time in the last eight weeks, keeping the purchase index near 13-year lows.”
Refinances accounted for 76.8 percent of total mortgage activity. Refinance activity has remained relatively strong because of historically low mortgage rates. However purchase activity has imploded following the expiration of the first time home buyer tax credit on April 30th. Purchase applications are a leading indicator of home sales, which have been sustained due to government stimulus. We should expect to see sharp decreases in home sales numbers over the remainder of the summer, assuming other factors remain the same.
The impending decrease in home sales and the large overhang of distressed homes on the market means that we can probably expect some declines in home prices through 2010.
Loading ...
RSS feed for comments on this post.
Leave a comment