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Home Loan Application Volume Declines
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May 23, 2005 LOS ANGELES -- Recent evaluation in the
scope of mortgage home loan market-related swings by The
Mortgage Banker's Association (MBA) reveals that overall, the number of
mortgage applications
fell in week ending May 13 by the largest percentage so far this year.
Particularly peculiar is the MBA's measure of home purchase loan
origination declination from a recent record amount. The reason this is odd is
based upon the fact that home loan interest rates are at record-setting lows not
seen since February.
The MBA's index of
home loan applications dropped 10.5% to 699.2. When you compare this figure
to 781.0 seen just one week earlier you'll see the oddities. When the sums are
all in, the fact is that purchase money loan origination saw its biggest decline
since the last week of December 2004. Here's a true anomaly: In the week prior
to the above-referenced May 13, home purchase application volume had sky rocketed
9.4 percent to the highest level since April 9 of last year.
Still, the fact remains that
home purchase
applications are still quite close to an all-time high. Based on this
information, economists predict that home sales this year will likely be the
second-highest on record. This augmented by an improved, and continually
improving, labor market as well as wage growth and borrowing costs remaining at
historic low levels.
Home loan interest rates, as measured by the MBA on a
consistent basis, have stayed within 1.5 percentage points of a four-decade low
figure totaling 4.99 percent (June 2003).
Mortgage rates are expected to rise this
year as the Federal Reserve measurably bumps
short-term interest rates,
as promised, to control inflation.
Article by Nolan
Voight, Mortgage Columnist.
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