Tags: Mortgage | Applications | Decrease | Refinancing | Drops

Mortgage Applications Decrease as Refinancing Drops

Wednesday, 03 Nov 2010 07:32 AM

The number of mortgage applications in the U.S. fell last week, led by a decrease in refinancing.

The Mortgage Bankers Association’s index declined 5 percent in the week ended Oct. 29, the Washington-based group said today. Refinancing fell 6.4 percent, while purchases rose 1.4 percent.

Current and prospective homeowners may be waiting to see what influence Federal Reserve policy makers’ actions will have on borrowing costs. Economists predict central bankers today will announce another round of large-scale assets purchases, known as quantitative easing, aimed at reducing interest rates and revving up the economy.

“If the Fed announced a big enough quantitative easing, this would drive down mortgage yields to new lows and set off a new wave of refinancing,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said before the report. “The housing market is still stuck in the doldrums.”

The refinance gauge has more than doubled since January as rates have fallen on concern the economic recovery may stumble. The purchase gauge has held near July’s 13-year low after a government tax credit expired.

The average rate on a 30-year fixed mortgage rose to 4.28 percent from 4.25 percent a week earlier, which matched the second-lowest on record.

At the current rate, monthly payments for each $100,000 of a 30-year fixed loan would be about $494, or $40 less than a year ago when the rate was 4.96 percent.

Mortgage Rates

The average rate on a 15-year fixed loan fell to 3.64 percent from 3.67 percent, and the rate on a one-year adjustable loan rose to 7.18 percent from 7.07 percent.

The share of applicants seeking to refinance a loan fell to 81.3 percent from 82.3 percent.

Foreclosure moratoriums at JPMorgan Chase & Co. and other banks, along with government investigations into faulty paperwork, threaten to further delay a recovery in home sales and prices as properties slated for repossession take longer to come to market.

In Arizona, California and Nevada, foreclosure auctions on courthouse steps, known as trustee sales, are down 42 percent since Sept. 20, according to ForeclosureRadar, a real estate tracking service in Discovery Bay, California.

“If what’s a hiatus turns into a moratorium, that’s quite problematic,” Stan Humphries, chief economist for Zillow Inc., a Seattle-based real estate data provider, said in an interview. “It will delay the ultimate bottoming process in the market.”

Housing markets are “weak,” with “sluggish or declining” sales in many regions, the Fed said Oct. 20 in its survey of regional districts for September and early October.

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The number of mortgage applications in the U.S. fell last week, led by a decrease in refinancing.The Mortgage Bankers Association s index declined 5 percent in the week ended Oct. 29, the Washington-based group said today. Refinancing fell 6.4 percent, while purchases rose...
Mortgage,Applications,Decrease,Refinancing,Drops
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2010-32-03
Wednesday, 03 Nov 2010 07:32 AM
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