Home Loan Applications Plummet
According to the Mortgage Bankers Association, the volume of mortgage applications for the week that ended May 16 fell by 7.8 percent to 621.6. The week before, volume was pegged at 674.4.
Breaking down the report; the refinance volume dropped by 8.7 percent for the week. Meanwhile, mortgage application for new purchases declined by 6.9 percent. The volume of refinance applications actually accounted for about 48.2 percent of the total applications.
The last time the index peaked was in May 30, 2003 when mortgage application volume was at 1,856.7. Coincidentally, this period was during the last housing boom when millions of homebuyers took out hybrid mortgages that featured zero interest option, no interest terms and adjustable interest rates.
Unfortunately, these hybrid loans were considered to be the reason why many owners lost their homes to foreclosure. Most of them did not realize what kind of mortgage they were getting and their brokers could not care less and were really just after the commission. As soon as the mortgage re-set, they found themselves with ballooning mortgage payments that they could no longer pay.
Declining mortgage application index could be indicative of a market where buyer confidence is waning. With the rising fuel and food prices as well as the weakening dollar, it can be expected.
But even with such sluggish market, many experts believe that there is no better time to buy a real estate property than now. Mortgage rates are low and homes have never been this affordable. With some patience, buyers could even find treasures among the many foreclosed properties up for grabs! The key, of course, is using good foreclosure listings to track down hot leads conveniently and easily. When it comes to providing the best leads, buyers can rely on Foreclosed Properties Data.
