From Bloomberg:
U.S. MBA’s Mortgage Applications Index Fell 7.3% Last Week
Mortgage applications in the U.S. last week fell by the most in four months as higher borrowing costs discouraged filings for home purchases and refinancing.
The Mortgage Bankers Association’s index of applications to buy a home or refinance a loan fell 7.3 percent, the most since the week ended Jan. 19, to 636.4. The group’s gauge of purchase applications fell 2.5 percent and a measure of refinancing dropped 13 percent.
The highest mortgage rates in seven months may have discouraged refinancing and kept buyers on the sidelines as they waited for home prices to fall. The report, along with figures showing a rise in mortgage defaults among subprime borrowers, suggests housing will continue to weigh on economic growth.
“We’ll probably have another leg down in terms of the ripple effects on the economy from housing,” Michael Gregory, a senior economist at BMO Capital Markets in Toronto, said before the report. “There’s still an awful lot of inventory, and that’s going to apply downward pressure on prices.”
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The mortgage bankers’ purchase index fell to 427 last week from 438.1 the previous week.
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Prices are responding to lower demand and an excess supply of unsold homes. House prices dropped 1.4 percent last quarter compared with the same period last year, the first decline in almost 16 years, according to a report yesterday by S&P/Case- Shiller.Still, lower prices haven’t been enough to jumpstart home sales. Combined sales of new and existing homes last month fell to 6.971 million, a four-year low.
As we prepare our move to NJ, with a plan to rent, I asked the realtor just for giggles to take a look at the LP of houses that have been on the market more than 100 days, and have at least one price reduction. Then I used zillow just to get past sale prices.
Most hysterical one was
2 runnymede rd, madison MLS 2371838. OLP 1.2 M, LP 1.0 M, purchased last october (from zillow)for $750,000. So this person is expecting in this market to make 250K in 7 months in a declining market. Even with other houses I still find it difficult to think about paying 900K to 1.2 M for a house that was 300K in 1999. And then 18K in taxes.
Renting here we come….still even that is 3000-3500 for 3 bedroom in morris plains/morristown, and 4000 plus in Chatham area. Why these areas, I am trying to not have a 1.5 hour commute.
NJ Bound-
Good luck to you. Don’t know how big your family is or ages of your kids, but you could live in closer to NYC (I’m assuming that’s where you are commuting to)for that amount of rent. Might not have as much room, but greater access to the city is fun.
JM
As per this topic,
Great News! Are people waking up finally and really looking at the costs of these mortgages?
TTFN,
JM
Just put aside the mortgage payment, how bout that 18k in taxes?! Sheeshh! No wonder the gov wants gun control, they’ve pulled out the heat with those killer taxes. ‘home owner’ what a joke.