Refinance Applications Down 1.4 Percent, Purchase Index at 12 Year Low

 

Housing is a key component of economic forecasts. Thus real estate surveys and housing data are closely scrutinized by policy makers.

Mortgage Bankers Association released the Weekly Survey on Mortgage Application Activity for the week ending November 13, 2009. The application survey covers over 50 percent of all US residential mortgage loan applications taken by mortgage bankers, commercial banks, and thrifts. The data gives economists a look into consumer demand for mortgage loans.

A rising trend of mortgage applications indicates home buying interest is increasing, a positive for the housing industry and economy as a whole. Furthermore, in a low mortgage rate environment, a trend of increased refinance applications implies consumers are seeking out a lower monthly payments which can result in increased disposable income and therefore more money to spend on discretionary items . . . or just an opportunity to pay down other debts like credit cards and car loans.

In the previous week's release, which reported on loan application activity for the week ending Nov. 6, 2009, demand for new mortgage loans increased 3.2 percent from one week earlier. The 30-year fixed-rate mortgage decreased to 4.9 percent from 4.97 percent. The Refinance index rose 11.3 percent while the Purchase index fell 11.7 percent, its lowest level since December of 2000.

Hopefully home owners and business owners who refinance will be able to apply the extra money into improvements such as landscaping.

- Courtesy of Mortgage News Daily