Mortgage applications continued to decline, as increasing mortgage rates have caused a slow in refinance activity, according to the Mortgage Bankers Association.
The Market Composite Index, which measures total application volume, dropped 7.4 percent on a seasonally adjusted basis during the week ending August 17. The Refinance Index led the decrease with a 9 percent drop that lowered the refinance share of mortgage activity to 80 percent of all requests.
Originations didn't decline nearly as much, as the Purchase Index fell just 0.9 percent compared to the week before and was 3 percent higher than the same period last year.
Refinance activity could potentially pick up in the coming months if White House-backed initiatives come to fruition. According to the Los Angeles Times, President Barack Obama and his administration hope to get legislation passed that would expand the pool of Americans eligible for refinancing.
"Facilitating more refinancing is the best way to help the housing market and the broader economy quickly," said Mark Zandi, chief economist of Moody's Analytics. "The reduction in mortgage payment is akin to $2,500 to $3,000 a year, so that is a pretty sizable tax cut."
This entry was posted on Thursday, August 23rd, 2012 at 2:58 am and is filed under Mortgage News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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