Mortgage Applications Slow Down

 

Purchases of new homes jumped as buyers rushed to qualify for the government tax incentive. To receive the credit of as much as $8,000, contracts had to be signed by the end of April, meaning demand will probably wane in coming months. Transactions must close by June 30.

Another report today from the Mortgage Bankers Association showed sales slowing this month. The Washington-based group’s index of home-purchase applications fell for the third straight week, to the lowest level since 1997.

The surge in purchases helped draw down inventory. The supply of homes at the current sales rate dropped to five months’ worth, the lowest level since December 2005, from 6.2 months in March. There were 211,000 new houses on the market at the end of April, the fewest since 1968.

– Courtesy of Bloomberg Businessweek