Houston's Rate Sheet

Mortgage applications rise

Driven by new home purchases, the number of mortgage applications has risen for the first time in three weeks. Here are some snippets from a report from Bloomberg:

A measure of U.S. mortgage applications rose last week, rebounding from the year's lowest level as home purchases increased.

The Mortgage Bankers Association's index of applications to buy a home or refinance an existing mortgage rose 1.2 percent to 571.7 from 565 a week earlier, the group said today. The gauge of purchase applications increased 2.7 percent to 404.1 the week ended March 24 from 393.6.

Mortgage applications rose for the first time in three weeks, suggesting consumers may be pursuing bargains with a record number of new homes on the market. Home sales are expected to fall this year for the first time since 2000, putting a weight on total economic growth...

...Adjustable-rate mortgages are becoming less attractive as the Federal Reserve raises short-term interest rates. Fed policy makers yesterday raised their benchmark interest rate for a 15th consecutive time, to 4.75 percent from 4.5 percent.

Higher mortgage rates and prices are making housing less affordable and will lead to a slowdown in sales this year, David Seiders, chief economist at the National Association of Home Builders, said in an interview on March 24...

...Cash extracted through refinancing may drop to $117 billion this year, from an estimated $243 billion in 2005, according to a report last month from Freddie Mac, the No. 2 buyer of mortgages. Consumer spending probably will cool to a 2.9 percent rate by the end of the year from the current quarter's 4.7 percent, according to a Bloomberg News survey of economists taken from Feb. 27 to March 7.

The share of total applications represented by refinancing fell to 37.3 percent last week, from 38.1 percent the week before. Adjustable-rate mortgages applied for rose to 28.7 percent of the total from 28.3 percent.

Sales of new and existing homes will fall 6.1 percent to a combined 7.85 million this year, the National Association of Realtors said on March 13. That level would still be the third- highest on record.

posted by Vincent Biondillo @ 3:33 PM