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Mortgage Purchase Applications Struggle To Gain Ground

By
Real Estate Broker/Owner

The Mortgage Bankers Association announced on Wednesday that the mortgage purchase application index rose just 0.9% from the previous week to 264.4.

This is the fourth consecutive week in which the index has remained below 265, a signal that demand for real estate continues to face a headwind.

The broader measure for the purchase index, the 4-week moving average, is down -2%.

The 30-year fixed rate mortgage fell from 5.36% to 5.17%.

While the NAR's pending home sales index continues to show strength, the MBA's purchase application index is telling a different story.

The reason this index is relevant is because it gives an indication of future demand for real estate.  With foreclosure filings up 33% year over year (Source: RealtyTrac), demand for real estate needs to increase to be able to absorb this new wave of foreclosures that is going to make land-fall over the next two to three years. 

 

 

 

Comments (4)

Chip Jefferson
Gibbs Realty and Auction Company - Columbia, SC

I had a client lock Monday without really talking to me about it. I had sent him some rate lock info but he didnt read it. Oh well.

Aug 06, 2009 02:06 AM
Bill Ladewig
LoanOfficerSchool.com - Escondido, CA
Experience Is Your Advantage

Hi Mark, whew, then it just wasn't me in July.  The good news is that the vacation month of August looks like it will be a good one based on my production.  So far, five days in, I have almost surpased July. 

Aug 06, 2009 02:24 AM
Darin Osenberg
Funky Quail Vintage - Nashville, TN

HI mark,

Like BILL above me here..and his updates..>I really like your short little ones too!  I think MARKET snapshots help everybody!

I am a little confused tho...(which , I KNOW HAPPENS WITH ME!  :)

Didnt a report just come out yesterday that said for the first time in 12 years, we have seen a rise in home sales??

Which, in turn would result in Purcahse applications going UP??

Here's a link...http://finance.yahoo.com/news/Pending-home-sales-index-apf-455610974.html?x=0&.v=12

Tell me ...what am I missing??

Aug 06, 2009 04:42 AM
Mark MacKenzie
Phoenix, AZ

Laura:  Apparently that is what some Americans have been thinking like the past couple of weeks.

Bill:  That is great congratulations!

Darin:  Existing home sales are virtually unchanged from where they were last year.  Meanwhile foreclosure filings are up 33% year over year.

Typically a mortgage purchase application is the first step in buying a home.  Then a contract goes pending.  Then the sale closes.

Mortgage purchase applications are a leading indicator of exisitng home sales for the next 30-60 days

Aug 06, 2009 02:42 PM