More Videos
- Oil Next Week: What Traders Will Be Watching
- Hedge Fund Billionaire Paulson Reports New Citi Stake
- Cramer: 5 Earnings Reports to Watch Next Week
- Court Rejects 'Clawbacks' for Alleged Stanford Victims
- Tax Credit Sparking First-Time Home Sales: Realtors
- Investors Cut Back US Stocks for Bigger Growth Abroad
- Cities With the Most Home Price Reductions
- White House Plans to Freeze Spending to Cut Deficit
- This Year's Biggest Thanksgiving Leftover: Cash
- Oil Next Week: What Traders Will Be Watching
- Dollar is Not Plunging—So 'Calm Down': Market Strategist
- Strategists Say Markets Have More Upside — But How Much?
- Hirschhorn: Risk-Averse Traders
- Roginsky: A Funny Thing Happened on the Way to Financial Reform
- This Year's Biggest Thanksgiving Leftover: Cash
- TV Series Inks Unique Deal For Fight
- First Time Buyers Rescue Housing: Realtors
- Dollar General Trades Higher After Its IPO
- Fed Reform? Not So Fast.
MOST SHARED
- Seeking Innovation in Health Care
- Today's Market Action
- Driving Health Care Innovation
- Herbalife Vs. Hedge Funds
- Israel: Leader of Business Innovation
- Has Twitter's Finest Hours (Seconds) Come and Gone?
- Microsoft's Bill Gates Praises Apple's Steve Jobs For 'Saving the Company'
- Warren Buffett and Bill Gates: Keeping America Great
- Low Interest Rate Investing
- Week Ahead: Investors Go for Quality, Assess Recovery
Text Size 
U.S. mortgage application demand skidded last week to an eight-year low, driven by a nearly 30 percent slump in demand to refinance home loans as borrowing costs rose, a trade group said on Wednesday.
The Mortgage Bankers Association's seasonally adjusted mortgage applications index, which includes both purchase and refinance loans, slid 20.3 percent to 379.9 in the week ended Oct. 31, the weakest reading since December 2000.
Requests for applications to buy homes as well as refinance mortgages have been swinging dramatically since early September as chaos swept over global financial markets.
Government interventions aimed at slicing mortgage costs have yet to take hold.
Average 30-year mortgage rates increased by 0.21 percentage point to 6.47 percent last week, matching the level of the week ended Oct. 10.
That fixed home loan rate is edging closer to this year's peak of 6.59 percent reached during the summer, well above the 2008 low of 5.49 percent in January, according to the trade group.
There is little reason to expect housing is in the midst of a turnaround with 30-year fixed mortgage rates at the upper end of a six-year range, unemployment at a five-year high and rising, and an excess supply of unsold homes pressing prices lower, analysts said.
 |
Casey Serin For Sale By Owner |
"Clearly getting mortgage rates to come down is going to help the housing market. It's certaintly not a be-all and end-all but it's one of the necessary elements," said Keith Hembre, chief economist at First American Funds.
Intensifying worry about potential job losses has chipped away at U.S. consumer confidence, stoking fears of a deepening recession and inhibiting demand for home purchases, analysts have said.
Planned layoffs at U.S. firms surged to a nearly five-year peak last month, rising 19 percent from September, as troubles that emanated from housing and banking spilled into the broader economy, according to a report by outplacement firm Challenger, Gray & Christmas.
"Without a job you're not going to qualify or try to take out a loan, and you have tightening standards across the board," Hembre said. At the same time, "who wants to buy an asset that's going down in value particularly with borrowed capital that's at a high rate of interest."
U.S. home prices have already slashed more than 20 percent off the top set in the summer of 2006, based on the Standard & Poor's/Case-Shiller index, and are widely seen losing another 10 percent.
The Mortgage Bankers Association said its seasonally adjusted purchase index dropped 13.9 percent to 260.9 last week, the lowest since December 2000, while its refinancing applications gauge sank 27.8 percent to 1,075.4 in the last week of October.
Refinancing applications had shriveled as mortgage rates jumped during the summer, leaving the index last this low in late August.
Print
Email
- Warren Buffett and Bill Gates spoke to Columbia students, and Buffett made the students a startling offer.
- For the chief of cable company Comcast, growth has been about making deals – generally very large deals.
- Some companies may start using insurance to shift carbon risk from their balance sheets to maybe... yours?
- The president and founder of Genesis Today wants to improve America’s health, and thinks Wal-Mart can help.
- Switzerland's privacy watchdog is taking legal action to force Google to make changes to its Street View service.
- A wealthy, distracted Texas driver crashed his million-dollar Bugatti Veyron sports car into a salt marsh, say police.
Data is a real-time snapshot *Data is delayed at least 15 minutes