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Mortgage Application Activity Slips, Hurricane Sandy Partially Responsible
|Data from the Market Composite Index shows mortgage loan applications decreased 5 percent on a seasonally adjusted basis, while they were also down 5 percent when measured on an unadjusted basis.
Thrusday, November 8th, 2012
While current homeowners continue to take advantage of affordability offered by record low mortgage rates throughout much of the year, applications have been down in recent weeks as the slower sales season begins. A new report from the Mortgage Bankers Association reveals the Weekly Mortgage Application Survey likely posted declines for the week ending November 2 after housing markets on the East Coast were silenced by the recent storm.
Data from the Market Composite Index shows mortgage loan applications decreased 5 percent on a seasonally adjusted basis, while they were also down 5 percent when measured on an unadjusted basis. The seasonally adjusted Purchase Index posted a 5 percent decline from the previous week, and fell 7 percent on an unadjusted basis.
Current homeowners looking to finance their mortgage loan have been very active throughout the year, taking advantage of lower mortgage rates reported by Freddie Mac. MBA reports the Refinance Index dropped for the fifth consecutive week, reaching its lowest level since August. The refinance share of activity matched that from last week, as refinances accounted for 80 percent of all activity.
"Last week's storm had a significant impact on application volumes on the East Coast," said Mike Fratantoni, vice president of research and economics for MBA. "Applications fell more than 60 percent compared to the prior week in New Jersey, almost 50 percent in New York and nearly 40 percent in Connecticut."
While applications were down in many parts of the country affected by the storm, Fratantoni notes activity increased in other regions that weren't hit by Sandy. Though recovery will take time along the East Coast, high affordability should prompt some prospective buyers to make the investment before home prices and mortgage rates increase.
National real estate trends have a major impact on the real estate market on a daily basis. Keeping up-to-date on the latest news and notes posted by GL Homes can make sure those looking for South Florida homes know exactly how the current market will affect them.