Savings Experiment: Snow Removal
The Money Man Behind Rick Santorum: Who Is Foster S. Friess?
Are mortgage rates affecting U.S. mortgage applications? The short answer most likely is yes. Mortgage applications tumbled to a 7 month low, with refinancing loans down 30%, according to Reuters. This is clearly not a good sign for the housing market.
Kenneth Rosen from the University of California says that mortgage rates are just one factor causing the drop. He adds that high unemployment, concerns for job security, and problems with buyers being unable to sell their existing homes are also affecting the market.
Is there a magic number for mortgage rates? It seems that when rates went above the 5% rate, applications slowed considerably. The 30-year fixed rate climbed to 5.34% two weeks ago. Now is the time for the government to move in and bring rates back down below 5%.
Overall, mortgage applications were down 6.9% from a year ago. The index of refinancing applications, the USMGR=ECI, fell 30% to 1,482.2, the lowest since November 21. Refinancing applications, which account for 46.4%, were down 54% for the week and way down from the peak of 85.3% on December 9.
And 30-year adjustable rate mortgages (ARMs) were at 6.52%, down a tad from 6.54%
To summarize here, it seems that the 5% rate for 30-year fixed mortgages is the trigger that hits an emotional button in the refinancing market. When the rate dips below 5%, applications tend to rise, and then fall when the rate climbs above 5%. We need more data before we can see a clear trend, so it will be important to watch these numbers going forward.
Have you seen a drop in mortgage refinancing in your area?
Goldman Earnings Sink After Buffett Dividend
Johnson & Johnson's Income Falls 23%
Burberry Shares Leap on Sales Update
