Mortgage Applications Jump Last Week

Mortgage applications shot up 21 percent last week compared to the previous week on a seasonally adjusted basis, according to the Mortgage Bankers Association. On an unadjusted basis, applications rose 23.5 percent.

The unadjusted purchase index increased 17.5 percent compared with the previous week, but was down 11.2 percent from the same week a year ago.

“Mortgage application volume rebounded last week, returning the purchase and refinance indexes to levels from mid-December,” said Michael Fratantoni, MBA’s Vice President of Research and Economics.

“Rates continue to hover around 5 percent, quite low by historical standards, but are well above the record lows seen in 2009, and hence are not generating substantial refi volume,” Fratantoni said. “We expect that rates will rise over the next few months as the Federal Reserve winds down its MBS purchase program, and this will likely lead to a decline in refinance volume.”

Here are the average contract interest rate changes:

• 30-year fixed-rate mortgages decreased to 5.01 percent from 5.02 percent.
• 15-year fixed-rate mortgages decreased to 4.33 percent from 4.34 percent.
• 1-year ARMs decreased to 6.70 percent from 6.84 percent.

Source: Mortgage Bankers Association (02/03/2010)

Report: Record Year for Foreclosures Predicted

Las Vegas had the highest U.S. foreclosure rate in 2009, according to a foreclosure report released today by RealtyTrac.

Other cities with the nation’s highest rates are:

• Cape Coral-Fort Myers, Fla.
• Merced, Calif.
• Riverside-San Bernardino, Calif.
• Stockton, Calif.
• Modesto, Calif.
• Orlando-Kissimmee, Fla.
• Phoenix
• Port St. Lucie, Fla.
• Miami-Fort Lauderdale-Pompano Beach, Fla.

A record 3 million homes will be seized this year, the report forecasts.

“The dam will break and we’ll see a significant increase in foreclosures,” Michael Lea, a finance professor at San Diego State University, said in an interview. “The banks can’t continue to hope the economy starts growing.”

Source: Bloomberg, Dan Levy (01/28/2010)

Freddie Mac CEO: Housing Is Near Bottom

The inventory of foreclosed houses still hampers the recovery of the housing sector, but overall, the U.S. housing market appears to be at or near bottom, Freddie Mac CEO Charles Haldeman told the Detroit Economic Club on Tuesday.

He predicted that the 30-year fixed mortgage rate would remain between 5 percent and 6 percent through 2010.

“The big downside risk to all this is a large wave of homes now in foreclosure potentially hitting the market at prices that are destructive,” Haldeman said.

Source: Reuters News, Soyoung Kim (01/26/2010)