Interest Rates Rising – Mortgage Activity Slows Down 16 Percent
Remember all the borrowing and stimulus that the government is doing to save the economy and the housing market. And remember how all the experts told us that housing would lead the recovery?
Well, just as housing is getting it’s footing, the costs of the recovery programs are coming in. The lenders to the USA do not like it and interest rates are rising. As the interest rates rise, so do the mortgage rates.
Who wants to bet that this will stall any housing recovery dead in it’s tracks.
UGH!!!
The Mortgage Bankers Association’s index of applications to purchase a home or refinance a loan dropped 16 percent to 514.4 in the week ended June 12, from 611 the prior week. The group’s refinancing gauge declined 23 percent, while the purchase index fell 3.5 percent.
“Higher mortgage rates will keep ‘refi’ activity under pressure,” Tom Porcelli, a senior economist at RBC Capital Markets in New York, said before the report. “That removes a source of what some had hoped would be an added kicker to consumer spending.”
Rates began rising in May on concern increases in government borrowing to finance the record budget gap will prompt investors to seek higher yields, and Federal Reserve efforts to revive the economy will unleash inflation. Higher costs stunted a rush to lower mortgage payments as Americans tried to cope with the highest jobless rate in 25 years. Bloomberg.com.
Well Tom, once again you have said it much better than I could have. Unfortunately the folks at Move, ...
It certainly does not bode well for a fast recovery in the economic climate. This will affect all real estate ...
I HAVE 25 YEARS EXPERIENCE IN TELECOMMUNICATIONS..HOW DO I APPLY AT KAI. 
Definitely not a fan of Move Inc.!!! 
A lot of you really need to go back to kindergarten and learn to spell correctly. If you cannot spell ...
In 2008, there was an extension to push first-time home buyers to purchase their homes quickly since the program did ...
I also need HELP and don't know what to do about my problem. I have a garden apartment off ...
I have the same situation. I sold my home in July and am scheduled to to close in a few ...
My cousin in Maryland going thru same thing as Jack Thomas. Have loan Mod Agreement from Countywide dated April 2009, ...
Print Ads is the popular way to advertise among seniors in the business industry but today it seems like it ...
Comment by Kirk Kinder on 17 June 2009:
Did you really think that government manipulation of rates would work? The government has tried price fixing before and it works for a short while, but then it makes things worse in the end. It will again. By printing money to purchase MBS, the Fed is scaring investors from Treasuries. As they print more and more, it takes more investors away or at least the investors demand a higher interest rate.
Once this last bubble pops – Treasuries – the government will be in a position where it can’t help. It won’t be able to do any stimulus because the extra spending and borrowing will drive rates higher, and any printing of money by the Fed will have the same effect.
Comment by Portland Real Estate on 17 June 2009:
It had to happen at some point, I would like to point out though that even though the rates are rising they are still at very very low levels and that is going to keep the market going. Anyone who is imagining a comeback of the market as something similar to 2005, you are in for a surprise. Those imaginary numbers are never going to inflate to those levels again, as it was completely unsustainable as we see now.