Mortgage applications fell 2.8 percent last week on a seasonally adjusted basis to 654.2, according to the Mortgage Bankers Association weekly mortgage applications survey.
On an unadjusted basis, the index decreased 3.3 percent compared with the previous week, but was up 15.4 percent compared with the same week a year ago.The refinance share of mortgage activity increased to 46.4 percent of total applications from 43.5 percent the previous week.
Mortgage rates rose for fixed-rate products and dropped slightly for ARMS:
- 30-year fixed-rate mortgages increased to 6.38 percent from 6.29 percent;
- 5-year fixed-rate mortgages increased to 6.06 from 5.99 percent;
- One-year ARMs decreased to 6.09 from 6.39 percent.
While these numbers look like more bad news, Doug Duncan, chief economist for the association, says they don’t accurately reflect the total housing story, and he offers these statistics to put the situation in perspective.
Duncan says the foreclosure problem is predominantly based in seven states. In Michigan, Ohio and Indiana homes are in foreclosure because of job losses. Since 2001, Michigan alone has lost 300,000 jobs.
The other four hard hit states are California, Florida, Arizona and Nevada where there has been significant overbuilding. About 25 percent of the foreclosures in these states are on properties held by investors.
In 43 states, foreclosures have fallen in 2007 from 2006. Only 9 percent of all mortgages are subprime and 75 percent of all subprime mortgages are performing. In all, 98 percent of all mortgages in the U.S. are performing and 35 percent of the homes in the country don’t have a mortgage at all.
Source: Mortgage Bankers Association (09/26/07)/Realtor magazin
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