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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: loantech who wrote (2388)	11/19/2003 9:25:21 AM
From: russwinter	Read Replies (1) \| Respond to of 110194

The big drop in rates spiked purchase activity, but did nothing for refis. Look at all the ARM activity, nutty. Reuters Mortgage Requests Up as Rates Fall Wednesday November 19, 7:55 am ET By Richard Leong NEW YORK (Reuters) - Applications for home loans rose last week as new requests for loans to buy homes picked up, and 30-year mortgages rates fell to their lowest levels since early July, a trade group said on Wednesday. The Mortgage Bankers Association said its market index, a barometer of total mortgage applications, increased to 663.2 in the week ending Nov. 14, up 5.9 percent from the prior week. Mortgage refinancing and home purchases have provided crucial support to an uneven U.S. economy, but their economic impact is expected to wane as other sectors of the economy have showed signs of improvement, economists said. Any cooling in mortgage demand and home sales, both poised to set records for 2003, will likely be modest, however. "Interest in the housing market has clearly fallen off," said Robert Brusca, chief economist at Native American Securities. "But it won't be too much of a slowdown. It'll be a little backtracking." On Tuesday, the National Association of Home Builders said its sentiment index fell 3 points to 69 in November. It also said that its members saw a drop off in visitors to model homes. Interest rates on a 30-year fixed-rate mortgage, the most popular U.S. home loan, averaged 5.64 percent last week, down 30 basis points from the prior week, the trade group said. Last week's average 30-year rate, which excludes fees, was the lowest since 5.33 percent for the week ending July 11. Mortgage rates slid last week with Treasury yields, which fell sharply on strong interest in the quarterly Treasury refunding and comments from Federal Reserve officials suggesting that the Fed is in no hurry to hike rates. Given the drop in rates, the group's index gauging applications for mortgages to buy homes rose 13.5 percent to 425.9 last week, which was the highest level since the week ending Oct. 3 when it was at 441.1. But the group's index measuring applications to refinance mortgages fell 1.9 percent to 2,043.9. The weekly refinance gauge is 80 percent below the all-time high of 9,997.8 set in the week ending May 30. STRONG ADJUSTABLE LOAN DEMAND Although falling last week, interest rates on fixed-rate home loans are roughly half a percentage point higher than the 45-year lows set in June. Thus, more Americans have opted for adjustable-rate loans, which could run more than two full percentage points less than fixed-rate loans, according to Mortgage Bankers Association's latest data. Last week, the share of new applications for adjustable rate loans hit a three-and-a-half year high. Last week, fresh requests for variable-rate mortgages comprised 27.5 percent of all applications and 39.9 percent in term of dollar volume, the mortgage industry group said.