Wednesday, July 23, 2008

Mortgage Applications down 6.2 Percent last week

We have been saying here on HD about housing is a long way from bottoming out. We have record inventory. The economy is about to get worse, jobs numbers have been bad and July numbers are going to be even worse with a revision for mid-year coming. And we have been saying the mortgage rates are going to go up with all the foreclosures and rising inflation.

Last week's mortgage applications dropped 6.2 percent in week ending July 18 to 489.6. The rates rose to 6.59 percent for 30-year mortgage. That was a .37 percentage point in one week. It's the highest mortgage rate since July 20, 2007. We have higher mortgage rates after the feds cuts from 5.25% to 2%.
As if we don't have ennough issues, we've got rising foreclosures, and Fannie and Freddie issues. It means we have a long way to go before we see a housing bottom.
Of course, analysts will try to tell you that problems with banks are over. Remember that the root cause of all this is the housing market. Until we see a bottoming out in the housing, all the other financial issues will still be there.

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