Home Purchase Applications Drop.....

Home loan applications fell 1.5 percent on a seasonally adjusted basis for the week ending May 14, the Mortgage Bankers Association said today.

The refinance index actually jumped 14.5 percent from one week earlier thanks to the low interest rates on offer, but home purchase applications plummeted 27.1 percent to their lowest point since May 1997.

It’s pretty clear the expiration of the homebuyer tax credit in late April led to this extreme drop-off, and it makes you wonder if home prices will be able to sustain, even with the near record-low mortgage rates on offer.

The decline in purchase apps pushed the refinance share of mortgage activity from 57.7 percent to 68.1 percent of total applications.

Meanwhile, the popular 30-year fixed-rate mortgage slipped further to 4.83 percent from 4.96 percent, and the 15-year fixed averaged 4.19 percent, down from 4.32 percent.

The one-year adjustable-rate mortgage dipped to 6.81 percent from 6.86 percent.

Mortgage points increased on all loan types, somewhat eliminating any benefit tied to the interest rate improvement.

The interest rates above are good for mortgages at 80 percent loan-to-value.

The MBA’s weekly survey covers more than half of all retail, residential loan applications, but does not factor out duplicate or rejected apps, which have surely risen since the mortgage crisis began.

I am an actual person so if you are interested in refinancing you can receive real time quotes and payment options by calling me directly.

You can reach me, Gene Neal at 877-276-6400 Ext 101.