U.S. Mortgage Refinancing Applications Rose in the First Week of 2010.

Posted on : 18-01-2010 | By : admin | In : Financial News

Tags: 2010, Applications Rose, First Week, Refinancing Applications Rose

0

U.S. Mortgage Refinancing Applications Rose in the First Week of 2010.

Posted on | January 17, 2010 |

It seems like only yesterday that we were hearing about Option ARM Mortgage rates resetting, and that holders of those loans were unable to refinance because their house was worth less than the mortgage…. Oh, wait… it was yesterday.

Well, even so, things appear to be confusing in the housing market and mortgage industry still.

According to a recent Reuters article, the rise in mortgage applications the 1st week of this year is a reflection on the demand for refinancing loans. Demand for mortgages for new purchases only rose marginally.

According to the Mortgage Bankers Association, the index of mortgage applications (both purchase and refinance mortgages) was up 14.3%, though the index was less than half of what it was a year ago. And the 4-week moving average of mortgage applications was down 6.4%.

The article quotes Bob Walters, chief economist at Quicken Loans as stating:

“What makes the (applications) increase interesting is that nothing exceptional occurred to prompt people to return to the market,”

But I’m wondering if it isn’t the threat of those option and interest only ARMs resetting staring people in the face. But, I’m only a blogger, what do I know?

Another factor that ties in with the ARM reset is the anticipated rise in mortgage rates when the Federal Reserve stops buying mortgage-related securities at the end of March. Part of the purpose of this program was to bring rates down and keep them down to allow the market to at least stabilize, if not start to see some growth.

Things look to stay rough for the time being though. The Mortgage Bankers Association forecasts that mortgage originations will drop a further 40% in 2010, to the lowest level in a decade. And the Yale University economist Robert Shiller has said that he expects housing prices in the U.S. to continue falling in the next few months.