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Mortgage applications fell by 9%, is that true?

I heard a report yesterday on the local business radio station here in town that said mortgage applications nationwide were down by 9% in the last month. Wow, that scared me a little and I called my two main mortgage brokers and both said that, overall, yes with the rates climbing, that applications were down.

One even said that I was the only one to send her any clients in the last month. I actually sent her 4 to get pre-approvals on. She told me that she was amazed at the negativity and she also said that I was the only one that always seemed to be positive on the phone with her.

She says that despite interest rates every one of my buyers was cheerful and happy to be looking. I asked her what she thought the difference was and she thought it was the fact that I pointed out that historically we still have really low interest rates. We don't have 19% interest rates like in the early 80s or 10% like we did, just 10 years ago.

She said your buyers realize that they easily could go back up to that and are happy to pay 6.5% when I show them how much they are losing by paying rent versus owning a home. She said it is a different market and you educate your buyers to that and I think they realize that the world is changing again and if they buy now they will be the ones that win in the end.

You see I think that the people that bought houses in 1977 when interest rates were ok and house prices were low made a lot of money in the early 80s when interest rates started to climb, as well as prices. My parents bought their first home for $60,000 at 12% interest and in 1981 that home was worth $120,000. If they had chosen to, they could have sold it on owner financing at 15% and people would have been happy to pay it because it was still 4% cheaper than a lot of the banks were offering at the time.

Financial freedom can be reached through home ownership, and time and time again the market will adjust, but in the long run, it seems to always go up! If you are a buyer, now and even later, it will always be a good time to buy real estate. If you give me a call today, I can sit down with you and show you all the reasons you should buy today!

Todd Clark - Broker / Sales Coach
Palazzo Realty Group
Phone: (503)524-9494
Fax: (503)622-8739

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Posted by Todd Clark (Broker) (503)524-9494 (Beaverton, Oregon Real Estate Expert) on 05/16/2009 10:44 PM

Comments (15)

Applications in the Mortgage / Finance Channel

loan applications, down, market conditions, realtors

Originally posted at: Living Beaverton - Your guide to everything Beaverton: Mortgage applications fell by 9%, is that true?

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15 Comments on Mortgage applications fell by 9%, is that true?

JUN

2008

Hopefully with rates on the rise, buyers will realize that affordability is decreasing and will get off the darn fence!!

MAY

Most of my current buyers are cash buyers. I do have a few that are pre-approved...for what that word is worth...

this is why i dont watch the news... Work your tail off, and everything else will fall into place. You can tell me they're down 50%... who cares. I will still be pounding the pavement and making a good living while more of my competition gets weeded out.

MAY

Todd, great post, I think that some buyers are still frightened by the media's constant stories about how tight the restrictions are by the lenders and how difficult it is to obtain a mortgage. The fact is, if you are looking to buy, you may never again see interest rates this low.

Todd, Your clients are fortunate that you have a home schooling background. You believe in educating both your kids and your clients...

Great positive logic and perspective. People are just frozen in fear I think, still waiting to see if they are going to have a job, and if the wolrd is going to implode.

Hey Todd! I always enjoy your articles. What happened to the "reblog" button?

Have a great Sunday.

Blessings, Jill

Over the years, I remember seeing old deeds of trust and notes with 12%, 14% and even 18% interest rates. I remember asking one estate planning client about the 16% interest rate. Her response surprised me at the time. She didn't miss a beat - she said "We were happy to get a loan to buy the home." At the time, loans were difficult to obtain. Property was subject to redlining in some case. Downpayments were substantially higher. It is amazing how many people search for 1/4 of 1% interest rate and complain about 5.5% as a rate. Times have definitely changed. Maybe making it too easy wasn't the right answer.

It amazes me with all the incentives going on for first time home buyers that more are not out buying. Heck why not? Are they expecting it to drop even more? I guess in a few months we will see who is right about what will happen over the next couple months.

Let's all hope for the best and the economy to turn around and job cuts to stop!

Todd

The media does not help an awful lot, and this cycle will take time. In the 80's I remember them coming out with an ARM product and the rate was only going to be 10.5%. A deal at that time.

I was very interested when I first heard about the interest rates in the 80's! Hope they (interest rates) stay low for a while longer, too many of the buyers are not fitting into the first time home buyer bracket and we need BUYER INCENTIVE for them to purchase those vacation homes and investment properties!

Todd --- you are so right --- it is always a good time to buy a home. I was in the r.e. business when rates were 19% --- we still sold homes - notice I said homes, not houses.

Mama Liz's Signature

I've bought and sold homes in all ranges of mortgage interest rates. Over the long haul home ownership is a good thing.

MAY

Todd, I know we talked about you changing your niche, but this is the exact reason you should be listing homes that offer owner financing. People are tired of the bank industry and they are looking for an alternative that is out there and if you are the one offering it, they will naturally find you!

JUN

Thanks for this good article and encouragement that now continues to be a good time for a homebuyer, and that's true here in Orange County, CA.

Question: Are Mortgage Applications The True Indicator of Where Residential RE Market is Going? http://tinyurl.com/n9etkb

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