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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Tradelite who wrote (15053)	11/13/2003 4:15:41 PM
From: MulhollandDrive	Respond to of 306849

Mortgage Applications Match June 2002 Low Reuters Thursday, November 13, 2003; 10:42 AM NEW YORK - Applications for U.S. home loans dropped last week to their lowest level in almost a year-and-a-half, a trade group said on Thursday, as rising rates cut into demand for homes and mortgage refinancing. The Mortgage Bankers Association of America said its barometer of mortgage applications fell 8.6 percent in the week ended Nov. 7, reaching its lowest level since the week ended June 14, 2002. Applications to refinance mortgages and for mortgages to buy homes both fell last week, with refinancing applications down almost 80 percent from their all-time peak, reached during the summer when interest rates hit a 45-year low. "The mortgage business has been running so hard, for so long, that some sort of slowdown was almost assured," said Gregory Miller, chief economist at SunTrust Banks in Atlanta. The declines suggest the housing sector may start slowing after propping up the economy for two years, but that does not necessarily threaten economic growth, analysts said. "Other areas (of the economy) will be picking up the slack," Miller said. Declines in applications last week came as the rate for a 30-year mortgage, the most popular home loan in the United States, rose 0.09 percent to 5.94 percent, the Mortgage Bankers Association said. Thirty-year rates have risen almost a full percentage point since reaching record lows in mid-June, according to MBA data. With higher rates, applications to refinance mortgages fell 10.1 percent last week, bringing the trade group's refinancing index to 2,084.2, its lowest level since late August. Applications for mortgages to buy homes fell 7.1 percent, bringing the group's purchase index to 375.4, 18.5 percent below its peak in late May. Falling applications for mortgages to buy homes suggest that sales will slow in coming months, but so far, sales have been strong. Existing home sales reached a record in September, the last month for which data are available, while new home sales were close to a record level. With strong demand for homes, housing investment rose 20.4 percent last quarter, according to gross domestic product data, helping to fuel overall economic growth of 7.2 percent. The housing sector also influenced consumer spending, as home buyers furnished their homes, and bought appliances. Consumer spending on durable goods rose an eye-popping 26.9 percent in the third quarter, according to gross domestic product data. But the number of consumers looking to buy homes at current financing rates is waning, economists said. "There's no question, we're losing momentum here," said Christopher Low, chief economist at FTN Financial in New York.