Is The Spring Thaw Warming Up The Housing Market? Looks That Way
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New statistics out from the Mortgage Bankers Association show a steep increase in mortgages applied for over the prior week. New loan applications were up 7.3 percent as new mortgages and refinancing opportunities took center stage.
New home sales were down in January after an especially cold weather pattern covered the country. The previous December had seen fairly strong activity so the drop off was expected by experts.
The Mortgage Bankers Association’s index of applications to buy a home or refinance an existing loan increased 7.3 percent last week to 671.6, from 626.1 the prior week. The group’s gauge of purchase applications rose to a five-week high, while refinancing surged to the highest level since early December.
The figures help bolster the view of Federal Reserve policy makers that the housing market is starting to stabilize and will become less of a drag on the economy. A decline in the average 30-year fixed mortgage rate to a three-month low and cheaper homes are generating buyer interest, economists said.
“Housing demand is finding a base,” said David Sloan, senior economist at 4Cast Inc. in New York. “The market isn’t recovering significantly but sales are starting to stabilize.” via Bloomberg.com
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Comment by Ed on 7 March 2007:
While I am encouraged that the numbers increased, not a lot of new homes or existing homes are being bought. In the midwest January has historically been a great month, but this year January was dismal. This report makes me believe that equity is being taken out of properties to cover taxes, other debt or the lenders are looking to shore up some bad debt (especially the sub prime debt that has grabbed so much attention lately)
can add - Ed
http://www.ropenhouse.com
Comment by BigDaddy on 7 March 2007:
You have GOT TO BE JOKING!!! Spring Thaw? For there to be sales there must be Financing which must get approved by a bank which gets it information from an appraiser who if they are doing their job correctly would simply say that the market could possible lose value of the up coming months which causes the bank to tell the person who they are lending the money…”Sorry, we can’t lend you anything because we have no idea where this market is going. Please try back in a few months”.
These stories have one purpose. That purpose is to do anything to restart the housing market. Look for values to fall 25 to 30% in 2007, and another 20 to 30 in 2008 and 2009. The bottom is still a few years off. Once we hit bottom, get ready to stay there for a while.