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Mortgage rates and applications fall

Shared by Sara on Tue Sep 08, 2009 3:49 am

According to the weekly index of Mortgage Bankers Association (MBA), the mortgage rates were down last week. However, what is surprising is that the mortgage applications have also fallen last week. It was found that mortgage loan application volume had decreased by 2.2% compared to earlier weeks on a seasonally adjusted basis. Even, the refinance index also took a plunge thus falling by 3.1% over the week.

Source: http://www.bizjournals.com/portland/stories/2009/08/31/daily34.html
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Mini Profile  savior70

Joined: 25 Mar 2009


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Location: Florida

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PostPosted: Tue Sep 08, 2009 6:49 am    Post subject:

Hi,

It is indeed surprising, Sara. Generally, a drop in the mortgage rates triggers a rise in the number of mortgage applications. As the interest rates fall, more people tend to apply for home loans or go for refinance. But it is a bit strange that the rate of application went down with the declining interest rates.

A few weeks back, the weekly index of Mortgage Bankers Association (MBA) showed a positive rise in the total number of new mortgage applications as well as refinances. But I believe the recent drop is just temporary and does not reflect the general trend in the market. The current First Time Buyer Tax Credit is going to expire in a few months' time. I'm sure more people will start applying for mortgages soon to close on loans before Dec. 1, 2009 and take advantage of the tax credit.
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