Posted on 09/27/2006 7:52:41 AM PDT by GodGunsGuts
ECONOMIC REPORT
Mortgage applications fall even as rates plunge
Purchase loans sink to lowest in nearly three years
By Rex Nutting, MarketWatch
Sep 27, 2006
WASHINGTON (MarketWatch) -- Unmoved by a big drop in interest rates, the volume of applications for mortgages at major U.S. banks declined 4.9% last week, the Mortgage Bankers Association reported Wednesday.
The seasonally adjusted number of applications for purchase loans fell 5.5% on a week-to-week basis, to the lowest level since November 2003. The number of refinancing applications decreased by 4.1%.
(Excerpt) Read more at marketwatch.com ...
Well, we're on the road to Hell now! Marketwatch says so!
Rates are still higher for a new loan than I'm paying now. No way I'm going to refi!
It'll pick up in a couple of years as people start moving again.
ping
Applications down but new home sales up?
Must be paying CASH!
What a great economy
Perhaps that's because of all the incentives new home builders are offering. Just a guess.
In Michigan, houses sit on the market for over a year, this news is not surprising.
From another MW article:
The government cautions that its housing data are subject to large sampling and other statistical errors. Large revisions are common.
The standard error is so high, in fact, that the government cannot be sure sales increased at all in August. The 4.1% increase is statistically meaningless.
It can take up to six months for a trend in sales to emerge. New-home sales have averaged 1.082 million per month over the past six months, up slightly from 1.082 million in the six-month period ending in July. The six-month sales average had fallen nine months in a row. The six-month average is down 16% from December.
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B4A9E1C6E%2D3542%2D41E0%2D9537%2DD116DAC97F8E%7D&source=blq%2Fyhoo&dist=yhoo&siteid=yhoo
From another MW article:
The government cautions that its housing data are subject to large sampling and other statistical errors. Large revisions are common.
The standard error is so high, in fact, that the government cannot be sure sales increased at all in August. The 4.1% increase is statistically meaningless.
It can take up to six months for a trend in sales to emerge. New-home sales have averaged 1.082 million per month over the past six months, up slightly from 1.082 million in the six-month period ending in July. The six-month sales average had fallen nine months in a row. The six-month average is down 16% from December.
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B4A9E1C6E%2D3542%2D41E0%2D9537%2DD116DAC97F8E%7D&source=blq%2Fyhoo&dist=yhoo&siteid=yhoo
Rates plunge ? The Feds haven't been lowering rates,they've been increasing them,which definitely hasn't helped the housing market !!!
In particular areas in Michigan, or is it across the board?
Home loan rates are set on the open market, not by the FED. The FED sets short-term rates.
You must live in the NE or Michigan.
You have unwitingly hit on something....the fed has been raising short term rates, yet mortgage rate...long term, 30 year loans, have been declining (creating a yeild inversion). There is some thought that the fed may not stop or lower rates, but increase again to send a message to the LT market.
Yield inversion is a sign of desperation. Big time.
That's a fact. There are several homes/condos in this neighborhood that have been on the market easily over a year. Tracking these home(s) prices on the web in that time i've noticed them lowering the price numerous times with still very little if any traffic.
If this state is stupid enough to re-elect the worst gov. ever along with hilliary's poodle stabenow...it gets what it deserves.
I don't claim to know much about the world of finance but I definitely see a correlation between Federal Reserve interest hikes and the increase by lending institutions on house mortgages and refinancing !!!
The Fed lowered rates recently, and left them unchanged the last meeting.
As for refinances, here in Sacramento housing prices have dropped about 10-15% from their high 16 months ago. A lot of people who bought with zero down 1 year arms are finding their mortgage payments adjusting way up, and would love to refinance, but their homes are not worth what they owe. Foreclosures are way up.
As it turns out,there is an indirect relationship between long-term and short-term rates. Perhaps this will help:
http://www.freerepublic.com/focus/f-news/1709271/posts
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