The housing market in the past year has been a series of small hits and big misses. Real estate agents, homebuyers, home sellers, and banks are all patiently awaiting the return to health. The industry is not dead, but it probably isn’t really feeling too good. Mortgage application submissions for home buying have increased recently. There was also fewer applications for mortgage modification. The majority, far and away, of mortgage loan activities is nevertheless for modifying mortgages into low cost loans.
Much more mortgage loan applications
More people have been filing home loan applications for purchasing a new home. Mortgage application submissions are tracked by the Mortgage Bankers Association, and they have noted a 6.3 improve in applications for a home purchase, which is the largest level since May, according to Reuters. However, it is not exactly great news. The number is up. The numbers of applications that mortgage lenders received are at record low levels though. Since May 2009, mortgage loan application rates have fallen by 40 percent.
Refinancing requests are the majority of applications
Most of the application submissions are for home loan modification. Those application submissions have declined by 3.1 percent since May of this year. That said, they are still about 82 percent of all mortgage application submissions. Mortgage rates are at a near 20 year low, as 30 year fixed mortgages have a rate of 4.5 percent, which makes them low interest loans. The MBA has been keeping track of these figures since 1990. Current rates are about as low as have ever existed. This is good for new borrowers. That is also great for people planning to refinance. However, since finance loans are so much harder to access, it is difficult for many to reap the benefits.
So what happened with the stimulus?
The stimulus seems to not have worked. Recovery will be from the bottom up, as the tax credit only worked for a while and the federal refinance program is a failure. There has to be more stable income for people. That way they will feel confident enough to buy.
Further reading
Reuters
reuters.com/article/idUSNLL7KE6FT20100908
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