U.S. Mortgage

U.S. Mortgage requests jump down as refinancing loses steam

By Julie Haviv. NEW YORK, July 29 (Reuters) - U.S. mortgage requests dropped for the first time in four weeks, caused by a decreasing in need for home refinancing loans because interest rates climbed, data from an industry group showed on Wednesday.

Requests for loan to purchase a home, a basic pointer of sales, were flat. Lack of interest for buy loans does not bode well for the hard-hit U.S. housing market, which otherwise has been showing signs of stabilization.

The U.S. Mortgage Bankers Association supposed it seasonally adjusted index of mortgage applications USMGM=ECI, which contains both purchase and refinance loans, for the week ended July 24 decreased 6.3 percent to 495.4.

Jeffrey Fisher, professor of real estate and director of the Benecki Center for Real Estate Studies at the Indiana University Kelley School of Business, thought the housing market has become stable, but thinks interest rates on mortgages are very significant presently and are possible to increase.

“The increasing in interest rates on mortgages is possible going to come with a rising in inflation and it has historically been fine for housing,” he thought.

Construction overheads are possible to begin going up again as well if the market in China remains to get better and their need for materials enlarges, he said.

“It will set up pressure on home prices,” he said.

Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 5.36 percent, up 0.05 percentage point from the previous week, and sharply higher than the all-time low of 4.61 percent set in the week ended March 27. The survey has been conducted weekly since 1990.

However, interest rates, were well below levels of 6.46 percent a year-ago.

But, mortgage rate continued over 5.0 percent for a ninth straight week. Some specialists think mortgage rates at 5.0 percent and lower are what is needed to build a substansial effect on home loan demand.

And with the U.S. joblessness level at 9.5 percent, its highest in almost 26 years, numerous capable home buyers who have lost or who worry they can lose their jobs are opting to stay sidelined although home affordability has improved significantly.

The MBA’s seasonally adjusted purchase index USMGPI=ECI was unchanged at 262.0.

The four-week moving average of mortgage applications, which smooths the volatile weekly figures, was up 2.6 percent.

WEEKLY REFINANCING ACTIVITY SLIDES

The Mortgage Bankers seasonally adjusted index of refinancing applications USMGR=ECI decreased 10.9 percent to 1,862.1.

After reading U.S. mortgage news above, you may read home refinancing related articles below: Amortization Calculator,  Refinance Home Mortgage, Home Refinancing, Bank Savings, Fast Money Loan

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