Few victories can be pointed to in the housing industry. The real estate industry, and especially individuals seeking to purchase or sell homes, banks looking to lend, and agents looking to get business going again, and it cannot happen a moment too soon. Some signs of life are beginning to show. There was a rise in the number of home loan application submissions for home purchases. There was also fewer applications for mortgage modification. That said, there is a slight catch. Applications to turn existing mortgages into low cost loans are the vast most of mortgage loan activity, which is anemic to say the least.
Much more filing mortgage loan application submissions
More individuals have been filing mortgage applications for purchasing a new home. The Mortgage Bankers Association recorded an increase of 6.3 percent in application submissions for a purchase, according to Reuters, which is the first significant improve since May of this year. Don’t, however, be deceived by that figure. There is a catch. An increase is a rise, however the number of applications turned in to mortgage lenders for a home mortgage is at record low levels. Mortgage loan applications rates are down about 40 percent since May 2009.
Most applications are for modification
The vast majority of mortgage applications are nevertheless for home loan refinancing. Applications for a modification dipped 3.1 percent, a slight decrease since May of this year, however modification application submissions made up almost 82 percent of all home loan applications. Currently, mortgages of nearly any configuration are low interest loans, as the rate for 30-year fixed mortgages is at 4.5 percent, a 20 year low. The MBA began calculating these statistics in 1990, and the current rates are nearly the lowest they have ever been. The low rates make for a good chance to refinance. That said, getting the credit is becoming fantastically hard.
Didn’t we offer a stimulus?
The stimulation programs have not had the effects that people were hoping for. As the tax credit only managed to temporarily prop up home sales, and the federal refinance program barely works, it seems the recovery to housing must come from below. There has to be much more stable income for people. That way they’ll feel confident enough to purchase.
Further reading
Reuters
reuters.com/article/idUSNLL7KE6FT20100908
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