Homeowners are clearly worried about the possibility of higher interest rates later this year and are asking for refinancing at increasing rates. The Mortgage Banker's Association reported a jump the last week in January to a 6 week high for new and refinanced loan requests. The MBA mortgage index jumped 21% the last week of January, with a 26.3% jump in demand for refinancing and a home purchase loan application increase of 10.3%. People are still trying to take advantage of 30 year fixed interest rates that hover around 5% and that are expected to rise again soon.
The housing affordability rate is also a factor in the rise in home loan requests, as is the continuation of the homebuyer tax credit program. On average home values have fallen 30% since their high in 2006, and have begun to stabilize. The expanded and extended homebuyer tax credit is now slated to end April 30, 2010, although homeowners will have until June 30 to actually close. First time homebuyers continue to be offered up to $8000 in tax credit, or up to 10% of the new home price. Current homeowners who have lived in the home for at least 5 of the last 8 years qualify for up to a $6500 tax credit. There are both income and home price limits to qualify for the credit.
Champion Realty Solutions, LLC