Wednesday, October 06, 2004

It looks like Pope Alan may just yet squeeze another few drops of blood from the US housing refinancing turnip.
New applications for U.S. home loans were virtually unchanged last week although 30-year mortgage rates rose to their highest level in a month, an industry group said Wednesday.

The Mortgage Bankers Association said its seasonally adjusted market index, a measure of mortgage activity, stood at 724.8 for the week ended Oct 1, almost unchanged from the previous week's 724.7. . . .

The Mortgage Bankers Association's seasonally adjusted index of new refinancing applications rose by 2.7 percent to 2,270.8 last week from the previous week's 2,211.1.
Amazingly, refi activity in the US is now at its highest level since April. Are there really that many homeowners out there in America who failed to take advantage of the refi opportunities in early 2003? Apparently so, but there's a twist.

Back in the halcyon days of mortgage refinancing -- May through mid-July 2003 -- the use of adjustable-rate mortgages was very low. For example, the week ending 16 May 2003 had an ARM share (ARMs as percentage of total mortgage loan applications) of just 12.5%.

Today it's a very different story. For the week ending 24 September 2004, the ARM share stood at 32.5%.

What does this tell us? That the last gasp of the US housing bubble is being fueled by adjustable-rate mortgages and the concomitant belief that ultra-low interest rates (30-year < 6%) are here to stay.


At 1:24 AM, Blogger alberthaanstra said...

Hi Blogger! Ik ben op zoek naar hypotheken Zou Afab echt zo goed zijn als iedereen beweert? Of kan ik beter zoiets als Geldshop proberen?

Groetjes Albert


Post a Comment

<< Home