Home Loans Hit 13-Year Low
Home Loans Hit 13-Year Low – Demand for loans to purchase U.S. homes sunk to a 13-year low last week and refinancing demand also slid.
Requests for loans to buy homes dropped 3.1 percent to a 13-year low in the week ended July 9, their lowest level since December 1996.
Refinancing applications fell 2.9 percent, and the mortgage market index that reflects total loan demand also fell 2.9 percent.
Rock-bottom borrowing costs are helping borrowers with pristine credit to buy and those who still have equity in their homes to refinance.
High unemployment and foreclosures remain major hurdles, and buyers worry that prices could dip further.
The April 30 expiration of homebuyer tax credits also sapped summer purchasing activity. Demand for loans to buy homes has fallen in nine out of the 10 weeks since the credit expired.
Refinancings accounted for 78.7 percent of all applications last week, the same as the prior week.
Talk has surfaced of a possible double-dip in U.S. home sales, though most economists doubt a second leg down would be nearly as severe as the first.
“It’s sort of a self-fulfilling prophecy, but if there’s going to be a double-dip you might as well stay on the sidelines as opposed to coming in to buy,” said Taylor Woods, president of Genpact Mortgage Services in Irvine, California.
“With as much turmoil as there is around loans that need to be modified, short sales, foreclosures — all of those signs really indicate to buyers and investors that there will be better prices come tomorrow,” he said.
Home prices have fallen about 30 percent from their peaks four years ago, according to Standard & Poor’s/Case-Shiller indexes.
“If there’s one part of the economy that might suffer some sort of a double-dip it might come out of the housing market,” said Cam Albright, economic research director and portfolio manager at Wilmington Trust Investment Management in Wilmington, Delaware.
Housing economists look for the autumn months to tell the story once the ripple effects of the expired tax incentives are in the past.
“There’s been an awful lot of demand shifted forward by the first-time homebuyers credit,” Albright said. “Once we get into the fall, maybe even sooner, some of that will begin to smooth out.”
And that’s the latest from Action News on new Home Loans Hit 13-Year Low.
Tags: home loan demand falling, home loans, Home Loans Hit 13-Year Low, home prices, mortgage loans
Great article