Mortgage Purchase Applications Sink To 8-Week Low

By
Real Estate Broker/Owner

The Mortgage Bankers Association released their weekly mortgage application survey on Wednesday which showed that the mortgage purchase application index has dipped to an 8-week low to 251.6.  This was despite the fact that the 30-year fixed rate mortgage declined from 4.73% to 4.62% this week.

The mortgage purchase application index has shown continued weakness over the past 13 weeks or approximately 3 months.  During this span the purchase application index has averaged only 258.  This would indicate that home sales in April, May, and possibly June will reflect weak demand for real estate.

To give this 258 number some perspective, the index hit a 9-year low during the week of February 11th when the index plunged to 235.9.

In other words, despite record housing affordability, economic weakness continues to trump demand for real estate.  The result is that home value declines will continue to plague housing for the foreseeable future.  The systemic problem is that most economists are projecting that unemployment could exceed 10% through 2010.

The solution is that rather than relying on first time home buyers to drive a housing recovery, Washington needs to include investment real estate as part of a housing and economic recovery plan.

Comments (3)

TIM MONCRIEF
Tim Monciref - Austin, TX
Over 2,000 homes sold…..

Ya still have to get confidence in the people; and, that is a mere mindset.  We may be close as the panic appears to be diminishing over the last 30 days.  I could tell someone that interest rates are zero and that won't get them off the fence.  We really need a calmer job report to come out......

Apr 30, 2009 03:50 AM
Richard Dolbeare, R(B)
eXp Realty - Wailuku, HI
R(B), ABR, CRS...Hawaii Multi-Island Specialist

Well it's certainly true that in my market, investment real estate remains very depressed.  All my busniess continues to be in homes purchased for the buyer to live.  Since my market is a resort area, that is a huge shift.

Apr 30, 2009 05:02 AM
Mesa, Arizona Real Estate Mesa Arizona Realtor
Homes Arizona Real Estate LLC - Mesa, AZ
AzLadyInRed

Mark, it seems as if we're busy....the only thing I'm seeing is appraisers and lenders are not helping "make" it happen. Hopefully things will iron themselves out....we're at a low inventory wise...;-)

Apr 30, 2009 02:18 PM