Mortgage Applications Collapse

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Another sign that the housing market isn’t in recovery mode, or anywhere close yet…

The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending June 26, 2009.  The Market Composite Index, a measure of mortgage loan application volume, was 444.8, a decrease of 18.9 per cent on a seasonally adjusted basis from 548.2 one week earlier.  On an unadjusted basis, the Index decreased 18.5 per cent compared with the previous week and decreased 7.4 per cent compared with the same week one year earlier.

The Refinance Index decreased 30.0 per cent to 1482.2 from 2116.3 the previous week and the seasonally adjusted Purchase Index decreased 4.5 per cent to 267.7 from 280.3 one week earlier.  The Refinance Index is at its lowest level since November 2008.
The four week moving average for the seasonally adjusted Market Index is down 9.2 per cent.  The four week moving average is unchanged for the seasonally adjusted Purchase Index, while this average is down 15.2 per cent for the Refinance Index.

As CNBC notes, new weekly mortgage applications are at a seven-month low, and of course they quote someone who thinks this needs to be “fixed” ASAP

Kenneth Rosen, chairman of the Fisher centre for Real Estate and Urban Economics at the University of California, Berkeley, said mortgage rates are just one factor driving potential borrowers.

“Rising unemployment, concerns about job security, potential buyers’ inability to sell their existing homes and problems with appraisals coming in too low are all weighing on demand,” he said.

“The government needs to take more aggressive action to bring mortgage rates back down to below 5 per cent as that seems to be a key level for the market,” he said.

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