Mortgage applications drop to eight year low

Posted Oct 22nd 2008 2:12PM by Michael Fowlkes
Filed under: Bad News, Consumer Experience, Market Matters, Money and Finance Today, Housing, Financial Crisis

More bad news on the struggling housing market today, as the Mortgage Bankers Association announced that last week mortgage applications dropped to an eight year low. This is another sign that people are not ready to jump back into the housing market just yet.

As we all know, home prices have been falling steadily over the past year, and we are all waiting to see the point where buyers decide that the price is right to jump back into the market. So far, that is just not happening. According to today's report, mortgage volume was 44% lower last week than the same period last year.

Refinancing applications were down 23.5% last week, and more importantly, mortgage applications to purchase new homes fell 10.9% from the previous week. The last time weekly volume was this low was all the way back in December 2000.

For now, its hard to see any light at the end of the tunnel. Tough times are expected to continue at least for the foreseeable future. Last night, the Mortgage Bankers Association predicted that the market will continue to slow through the end of this year, and at least through the first half of 2009.

For a better idea of just how slow the housing market has gotten, compare mortgage productions for the past two years and estimates on what we can expect to see next year:

2007 = $2.3 trillion
2008 = $1.86 trillion (expected)
2009 = $1.67 trillion (expected)

Definitely more tough times ahead. What are your thoughts on the situation? Have recent drops in home prices been enough to stir up your interest in the housing market, or are you continuing to sit on the sidelines and wait for prices to continue to fall before considering buying a new home?

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.

Tags: home sales, HomeSales, housing, inthenews, Mortgage Bankers Association, MortgageBankersAssociation, mortgages

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Reader Comments (Page 1 of 1)

10-22-2008 @ 3:19PM

BHarrison said...

Hmmmm . . . and eight year low point . . . and George Bush has been President for 7 3/4 years.

When bush became President, due to the "PAY Go" legistlation, Bush "inherited" the LARGEST BUDGETARY SURPLUS in American hisotry . . . and look at the results AFTER almost 8 years of his presidency.

George Bush is somewhat of a "POLITICAL ANTICHRIST" . . . lots of promises of "good intentions" but only the steady progressive delivery of progressive debacles to a point of the USA being on the verge of an unprecedented RECESSION/DEPRESSION.

Can ANY RATIONAL PERSON really support what Bush . . . or Congress . . . have done?

10-23-2008 @ 3:55PM

gerard said...

Thank you masters of the universeyou feckin up again jack-ass.

10-22-2008 @ 3:35PM

BHarrison said...

The American people need to back off and put all of this economic mess into proper perspective.

NEITHER George Bush NOR Congress "stepped in" to head of this economic debalce. They both WAITED UNTIL the Fed came to them out of desperation with the news that the economic structure of the USA was at a critical point of collapsing within a matter of days.

Neither Bush NOR Congress took ANY type of "proactive" actions to head off this debacle . . . they ONLY reacted when the Fed showed them that the roof was sagging and unquestionably going to collapse . . . then we found out that the foundation was badly cracked under the tiles and beginning to quickly sink.

Bush and Congress have NOT "provided any type of 'leadership' in any of this debacle" . . . theirs is ONLY "knee jerk reactions" . . . we're still a long ways away from "the bottom" of this debacle.

10-22-2008 @ 4:10PM

Joe Plumber said...

Only a fool would be buying a home right now unless it is a ficer up at at least 60 less than the current market. Nationally homes still need to retreat by another 20 to 30 percent. THEN YOU CAN BUY. No don't go long. Be conservative, rent right now and save more for a down payment ! You will be sweet dumb and happy ten years from now !

10-24-2008 @ 2:14AM

Aisha Smith said...

According to present economic scenario nobody will feel like going for mortgages.What i feel is that Mortgagescould be structured differently, so that adjustments in payments would be made systematically, automatically and continuously and not leaving the borrower live in stress.