Mortgage applications hit lowest level since '02
August 4, 2006, Detroit Free Press, Republish on this blog by Ralph Marcus (Mark) Maupin, Jr.
BY J.W. ELPHINSTONE
ASSOCIATED PRESS
NEW YORK -- Mortgage applications fell to their lowest level in more than four years last week, the latest indication that the once red-hot real estate market is cooling down.
The Mortgage Bankers Association reported Wednesday that its market composite index, a gauge of mortgage loan application volume, fell to 527.6 last week, down 1.2% from the previous week's reading of 533.8. This is the lowest index reading since May 2002.
The drop in loan volume comes as little surprise to most analysts, said Freddie Mac chief economist Frank Nothaft.
"On the whole, we expect lower origination volume throughout the year. It may not fall week by week and it may pick up a little bit at times, but we expect a decline," he said.
The main cause is higher mortgage rates. The Federal Reserve has increased key short-term interest rates 17 times since June 2004.
Although the central bank has indicated a pause in interest rate hikes is near, the effects of the increases will ripple through the economy for at least the next year, Nothaft said.
August 4, 2006, Detroit Free Press, Republish on this blog by Ralph Marcus (Mark) Maupin, Jr.
BY J.W. ELPHINSTONE
ASSOCIATED PRESS
NEW YORK -- Mortgage applications fell to their lowest level in more than four years last week, the latest indication that the once red-hot real estate market is cooling down.
The Mortgage Bankers Association reported Wednesday that its market composite index, a gauge of mortgage loan application volume, fell to 527.6 last week, down 1.2% from the previous week's reading of 533.8. This is the lowest index reading since May 2002.
The drop in loan volume comes as little surprise to most analysts, said Freddie Mac chief economist Frank Nothaft.
"On the whole, we expect lower origination volume throughout the year. It may not fall week by week and it may pick up a little bit at times, but we expect a decline," he said.
The main cause is higher mortgage rates. The Federal Reserve has increased key short-term interest rates 17 times since June 2004.
Although the central bank has indicated a pause in interest rate hikes is near, the effects of the increases will ripple through the economy for at least the next year, Nothaft said.
posted by Ralph Marcus (Mark) Maupin | 7:12 AM
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