Mortgage refinancing applications are downward but purchase application submissions increase

Few victories could be pointed to within the housing industry. Banks, buyers, sellers and real estate agents alike are awaiting a return to at least some decent activity. It’s not as though the industry has gone comatose; it’s just slowed down. There was a recorded uptick in the number of new home loan application submissions for purchasing a home. There was also fewer applications for loan refinancing. The majority, far and away, of mortgage loan activity is nevertheless for modifying mortgages into low cost loans.

Much more home loan applications

More people have been filing mortgage application submissions for buying a new home. There was an increase of 6.3 percent in application submissions for a fresh mortgage loan recorded by the Mortgage Bankers Association, according to Reuters. It is the biggest rise since May. However, it isn’t exactly good news. The number is up. The numbers of applications that loan lenders received are at record low levels though. Mortgage loan applications rates are down about 40 percent since May 2009.

Most applications are for refinancing

Many of the application submissions are for home loan modification. Applications for a refinancing dipped 3.1 percent, a slight decrease since May of this year, but refinancing applications made up almost 82 percent of all home loan application submissions. New mortgages would be low interest loans. The rate for a fixed 30 year is 4.5 percent. The MBA has been keeping track of these figures since 1990. Current rates are about as low as have ever existed. This is good for fresh borrowers. That is also good for individuals looking to refinance. However, since finance loans are so much harder to access, it is difficult for many to reap the benefits.

So what happened with the stimulation?

The stimulus seems to not have worked. The federal refinance program barely works. The tax credit only boosted sales for just a little while, so recovery is going to be slow and it will go from the bottom up. There has to be more stable income for people. That way they’ll feel confident enough to buy.

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Reuters

reuters.com/article/idUSNLL7KE6FT20100908