Mortgage applications up and down: Who to believe?

Posted Aug 13th 2009 12:00PM by Tom Johansmeyer
Filed under: Personal Finance, Housing, Recession

There's good news and bad news about the mortgage market. The good news is that you can get your information from a variety of sources. The bad news? You really need to get your news from a variety of sources.

Conflicting reports Wednesday suggest that mortgage applications are up -- and down.

According to the Mortgage Bankers Association, as reported by USA Today, mortgage loan applications are up 16.1% for the week ending August 7 relative to the same week the year before. This meshes with a second quarter increase in home sales in 39 states. Refinances accounted for 52.3% of mortgage applications (down from 54.2% the week before), and adjustable-rate mortgage applications increased from 5.4% of applications to 5.8%.

Reuters, on the other hand, chose to zero in on the week-over-week seasonally adjusted decline of 3.5% (which was reported in USA Today, as well). An increase in interest rates was cited as the problem. The 9.4% unemployment rate is also a problem, as many potential home buyers are remaining cautious in this economic climate.

The Mortgage Bankers Association report put the cost to borrow on a 30-year fixed-rate mortgage (net of fees) at 5.38%, up 0.21 percentage points from the previous week and the highest rate since mid-June. The market hit an all-time low of 4.61% the week ending March 27. A year ago, however, the rate on 30-year fixed-rate mortgages was a whopping 6.57%.

Tags: adjustable rate mortgages, arms, fixed rate mortgage, housing, housing market, housing sector, interest rates, inthenews, mortgage bankers association, mortgage rates