Mortgage Market News: Applications Up
Mortgage applications rose last week, thanks to an increase in those looking to refinance or buy. However, even though the Mortgage Bankers Association reports that overall mortgage applications are up, the specifics are less encouraging. Mortgage applications are still down as compared to this time last year, and fixed rate mortgage applications were down.
ARMs looking better again
According to the Mortgage Bankers Association, applications for adjustable rate mortgages are up to 3% of activity from 2.6% the previous week. This is somewhat discouraging, since one would hope that the lessons learned from the mortgage market crash would make fixed rate mortgages more palatable for many. On the positive side, though, applications for conventional mortgages are on the rise — meaning that conforming loans are becoming more popular (or people just realize they aren’t getting approved for jumbo loans right now).
And, mortgage interest rates dropped last week, reports MarketWatch:
Meanwhile, rates on 30-year fixed-rate mortgages averaged 5.99% last week, down from 6.16% the week before. The average for 15-year fixed-rate mortgages was 5.78%, down from 5.87%.
Rates on one-year ARMs rose, averaging 6.87%, up from 6.80% the previous week.
On this front, there is a great deal of hope that mortgage rates will fall even further after yesterday’s announced efforts from the government to force rates lower. By buying up mortgage obligations from Freddie Mac, Fannie Mae and Ginnie Mae, the government hopes to ease the flow of financing for mortgage loans — and bring down rates to make them more affordable.
Of course, the question is whether or not we’re going to be back in this place again in a few years. Mortgage lenders may be tightening requirements now, but what happens when times look good again and greed replaces fear? It is possible that this cycle repeats itself, since we are already seeing signs that our leaders and others are more concerned with ensuring the continuance of a debt-based economy, rather than encouraging wise personal finance decisions.
