Des Moines Mortgage applications drop on account of rise in interest rate
According to the Mortgage Bankers Association, its seasonally adjusted index of mortgage applications – which includes both purchase and refinance loans – dropped 3.5% to a reading of 499.0 for the week ended August 7. The drop was due to a rise in loan rates — the rate on 30-year fixed-rate mortgages, excluding fees, rose 0.21% from the previous week to an average of 5.38%. This is well above the all-time low rate of 4.61% in the last week of March this year.
Analysts say that as of now mortgage rates are within the reach of homeowners and are not negatively impacting the housing market. Celia Chen, senior director of housing economics at Moody’s Economy.com, said: “Even though mortgage rates are rising, they still remain quite affordable. The bigger obstacle to home buying is job losses and tight qualifying conditions for borrowing.” Chen said home prices will remain depressed on account of foreclosures. Moody’s Economy.com has estimated 3.85 million defaults this year compared to 2.7 million last year. “There are a large number of foreclosures in the pipeline and once they hit the housing market, they will pull house prices down again,” said Chen. “I expect house prices to continue falling until mid-2010.”
Iowa House Fixers LLC is helping people avoid foreclosure in Des Moines, Iowa.
