The Mortgage Bankers Association reported that its index of mortgage applications dropped 3.5% to 499 in the week ending August 7.
Celia Chen of Moody's Economy.com said that higher rates were responsible for the drop off in applications. A 30-year fixed mortgage, excluding fees, stood at 5.38% up .21 from the previous week. Interest rates last year were 6.57%.
Chen went on to say: "The bigger obstacle to home buying is job losses and tight qualifying conditions for borrowing."
Home prices are still under pressure due to growing foreclosures. Moody's Economy.com is expecting 3.85 million defaults this year compared with 2.7 million last year.
Although there are signs of stabilization, Chen said that home prices likely will fall again. "There are a large number of foreclosures in the pipeline and once they hit the housing market, they will pull house prices down again," sh said.
The refinance share of applications decreased to 52.3% from 54.2% in the previous week. This, however, was down considerably down from the peak of 85.3% in the week ended January 9.
15-year fixed rates were 4.71% up from 4.60% in the previous week.
I have said this before but it bears repeating. Before you decide to apply for a mortgage, go to www.mortgagecalculator.org. There you will be able to calculate your monthly payment. If at all possible take a 15-year fixed mortgage. You will save hundreds of thousands of dollars over a 30-year fixed one.
Do you believe that home prices will continue to drop into next year?
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Reader Comments (Page 1 of 1)
8-12-2009 @ 5:02PM
Dennis said...
Yes, they will continue to fall to their Normal adjusted pirces from 2004..
If oyur Area had a ave. of 5% apy growth, before the hustlers got into the market? Then use that as the Fair Price of the home..
All one had to is ck the previous Ave. Growth per Yr btwn yrs 1990-2001 to give you a Accurate APY growth value
using the rule of 72 by 5 = doubles every 14.4 yrs
Anyone who paid more than using this formula got fooled..
If your Community had a 1990-2001 apy of 8% ? by 72 = doubles every 9 yrs..
I went thru 6 offers on homes using this Formula until I got the home at my Price and guess what? It's still going for that today..!
If oyu paid more? You should SUE the Agent and the Loan/Broker for doing this Scam to you..
They Knew better, but they wanted the Commissions..
They committed Financial Fraud against you..
And if they want to keep their License? They will pay yuo the difference..to stay out of court and claims against them to keep their record clean..
2 can play this game..
and if they left the business? Go After them, you have 7 yrs to sue them for Deceptive Theft..
8-12-2009 @ 5:06PM
Dennis said...
Mortgage apps SHOULD be going way down and back to the averages of what they were prior to 2003... using btwn 1990-2000 as a guide
when It required HONEST Crediablity to get a Mortgage