27 Jan 10 Mortgage Loan Applications Decreased 11% Last Week
According to Bloomberg, the number of mortgage loan applications in the U.S. dropped last week for the first time in a month, led by a slump in home refinancing. The Mortgage Bankers Association’s index of home loan applications fell 11% to 513 in the week ended Jan. 22 from 575.9 a week earlier. The group’s refinancing gauge decreased 15%, while the purchase gauge fell 3.3%.
Mortgage refinance applications dropped significantly over the period. The mortgage bankers group’s home refinance gauge decreased to 2,260.4 from 2663.8 the prior week. The purchase index fell to 215.6 from 223 the prior week. The group’s refinancing index often turns volatile near year-end, making it difficult to determine the underlying trend. The measure plunged 38% in the last three weeks of 2009 then rose 35% in the first two weeks of January. FHA and VA loan applications followed the trend as well.
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The looming end of the government’s first-time homebuyer tax credit in November caused sales to slump at the end of last year. According to Russell Price, a senior economist at Ameriprise Financial Inc, “We’re seeing some stabilization in the housing market.” Price continued, “The spring selling season should be fairly positive, especially if we do start to see some positive employment growth and mortgage rates remain fairly low.”
