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Home Purchase / Housing Market Could Become Volatile
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Spike In Mortgage Applications Attributed To Low Borrowing Costs
April 9, 2005 LOS ANGELES -- With The Fed releasing
economic news last week about inflationary pressure fears and keeping their
promise of gradually elevating
mortgage rates, surprisingly,
mortgage application volume overall grew for the second consecutive week.
Why? Likely because we are seeing the lowest borrowing costs in the past two
months. The
application surge was for both home purchase loan origination and
mortgage refinancing alike.
The MBA, or Mortgage Bankers Association, reported index of applications
increased by 0.2 percent, rising to 714.1 in the week ending April 29. The prior
week showed 712.4. The MBA's measure of
home purchase applicants
climbed by 0.1 percent to 482.5. This represents the highest figure since late
December of last year. Overall applications for
refinance mortgage loans was 0.4
percent higher at 2061.2.
According to Joseph Abate, senior economist at Lehman Bros. Inc., growth has
slowed, but housing inventory remains good and has continued to conjugate
spending.
The tally of construction spending U.S. wide climbed above and beyond
forecasted
figures made in March. This led by increased work on new homes, factories and
commercial buildings.
It is common belief among economists that single family
residential home sales could very well begin to see stifling later-on in 2005 as
The Fed continues its campaign in raising interest rates in effort to keep
inflation from swelling.
As we reported last week, policy-makers in Washington raised the benchmark
interest rate on Tuesday by a quarter point, raising the rate banks charge one
another to the 3 percent mark.
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