| Mortgage Apps, Housing Starts Down |
| Written by Jonathan Dienhart | |
| 11.17.2009 | |
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Despite extremely low mortgage rates and an ongoing home buyer tax credit, the pace of mortgage applications slowed substantially in recent weeks. And while existing home sales seem to be improving, likely as a result of foreclosure and bank-owned property sales, new home sales have not shown quite the same hopeful signs of recovery. As a possible result, housing starts in October declined more than expected, suggesting home builders are being wisely cautious at adding additional supply to the fragile market. In the week ending November 13th, the MBA’s seasonally-adjusted purchase index dropped 4.7% from the previous week and was down 15.36% compared to the same time last year. This is the sixth straight week that purchase applications have declined and the lowest the purchase index has been since November 1997. The Market Composite Index, which is a measure of mortgage loan application volume, declined 2.5% on a seasonally-adjusted basis from the previous week. Drops in both refinance and purchase activity caused overall mortgage application to fall last week. Refinances continue to account for the bulk of mortgage application activity with 72.9% of total applications. The share of adjustable-rate mortgages (ARMs) declined to 5.4 from 5.5% in the previous week. ARM activity should continue to remain historically low as less banks are offering riskier adjustable rate mortgages while buyers opt for more secure fixed-rate loans. For more information on Mortgage Applications, click here. The total number of homes started for the purpose of residential construction decreased moderately in October. The total start level was 63,000 units below the value seen last month. During the period a total of 529,000 units were started, a sizable 10.6% drop from the level seen in September. Total starts in October were 31% below the year-ago figure and 58% below the October 2007 figure. Single-family starts were down sharply in October by 7% from the figure reported in September, 11% below October 2008, and 46% below the October 2007 rate. Multifamily starts took a huge dive in October, 33% below the level seen in September, and 49% below the October 2008 figure, and 78% below the October 2007 figure. Non-seasonally adjusted data reflected decreases in all of the nation's four regions, for all time periods tracked. For more information on Housing Starts, click here. Additionally, you can view all of the economic indicators we track on our main website, http://www.hwmarketintelligence.com |
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