It’s because buyers are looking for lower rates and lower home prices.
By Kerri Ann Panchuk September 5, 2012 • 8:01am
Mortgage applications fell 2.5% for the week ending Aug. 31 as credit conditions remained tight, stalling robust buyer and refinancing activity.
Interest rates also continued to decline with the 30-year, fixed-rate mortgage with a conforming loan balance falling to 3.78% from 3.80% a week earlier, the Mortgage Bankers Association said.
Interest rates and application filings also declined the previous week, setting a precedent that has housing analysts worried.
“Mortgage applications for home purchases fell sharply in August, providing further evidence that mortgage-dependent buyers are barely contributing to the recovery in the housing market activity,” Capital Economics said in a report. “Without a significant easing in credit conditions, it’s hard to see how this will change in the foreseeable future.”
Refinancing activity cooled falling 3% from the previous week, the lowest level since May. Meanwhile, the purchase index fell 0.8%.
The 30-year, FRM on jumbo loans also fell to 4.05% from 4.06%, and the 30-year, FHA loan declined to 3.54% from 3.60% a week earlier.
The refinance share of mortgage activity remained unchanged at 79%, while ARM activity grew to 5% of all loan applications.
The average interest rate on a 15-year, FRM declined to 3.10% from 3.12%, the MBA said. In addition, the average contract interest rate for 5/1 ARMs fell to 2.64% from 2.68%.
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Proprietary OC Housing News home purchase analysis
$239,900 …….. Asking Price
$195,000 ………. Purchase Price
8/3/2012 ………. Purchase Date
$44,900 ………. Gross Gain (Loss)
($15,600) ………… Commissions and Costs at 8%
$29,300 ………. Net Gain (Loss)
23.0% ………. Gross Percent Change
15.0% ………. Net Percent Change
276.3% ………… Annual Appreciation
Cost of Home Ownership
$239,900 …….. Asking Price
$8,397 ………… 3.5% Down FHA Financing
3.60% …………. Mortgage Interest Rate
30 ……………… Number of Years
$231,504 …….. Mortgage
$70,705 ………. Income Requirement
$1,053 ………… Monthly Mortgage Payment
$208 ………… Property Tax at 1.04%
$0 ………… Mello Roos & Special Taxes
$60 ………… Homeowners Insurance at 0.3%
$241 ………… Private Mortgage Insurance
$265 ………… Homeowners Association Fees
$1,827 ………. Monthly Cash Outlays
($158) ………. Tax Savings
($358) ………. Equity Hidden in Payment
$10 ………….. Lost Income to Down Payment
$50 ………….. Maintenance and Replacement Reserves
$1,370 ………. Monthly Cost of Ownership
Cash Acquisition Demands
$3,899 ………… Furnishing and Move In at 1% + $1,500
$3,899 ………… Closing Costs at 1% + $1,500
$2,315 ………… Interest Points
$8,397 ………… Down Payment
$18,510 ………. Total Cash Costs
$21,000 ………. Emergency Cash Reserves
$39,510 ………. Total Savings Needed
The property above is available for sale on the MLS.Contact us for a comparative market analysis, a cost of ownership analysis, or information on how you can make an offer today!
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