Mortgage Applications Increase 48%

Posted by Jeff on December 24, 2008 under Mortgage Info | Be the First to Comment

The Mortgage Bankers Association’s index of applications to buy a home or refinance a loan rose 48% last week to the highest level since 2003.  Is this good news?  Well, yes and no.

No one ran out to buy a house last week just because rates dropped.  Those smart home buyers were in the market already and were able to take advatage of the drop in rates when they were ready to apply for their mortgage.  But the trend in rates is down and housing is more affordable so more people will start to enter the market which is good for the economy.

As far as the rest of those applications, Read more of this article »

Why Haven’t Mortgage Rates Dropped?

Posted by Jeff on December 23, 2008 under Mortgage Info | Be the First to Comment

The Federal Reserve cut the Discount Rate but mortgage rates have barely improved.  The truth is the Fed has no control over mortgage rates.  Mortgage rates are a function of the bond market and fluctuate just like stock prices.  As investors buy and sell bonds, mortgage rates will change accordingly.  Sometimes they will change 2 or 3 times in a single day if the market is particularly active.

Investors are still worried about the safety of mortgage bonds so more investor money is going into government backed treasury bills and treasury bonds.  There is currently about a Read more of this article »