Mortgage applications tick up
Interest in mortgages to purchase a home, which plummeted after the April 30 deadline for the home buyer tax credit, is on the rise again -- at least a bit.
The Mortgage Bankers Association's newest survey shows mortgage applications for home purchases increasing 7.3 percent last week, compared with the week before. That's the first upward movement in six weeks.
But the level is still more than 30 percent below where it was a year ago, when the tax credit was in effect and enticing buyers. The May downturn sent applications tumbling to 13-year lows.
"While it is clear that purchase applications in May dropped sharply as a result of the tax credit induced increase in applications in April, it is unclear whether we are seeing the beginnings of a rebound now," said Michael Fratantoni, the trade group's vice president of research and economics.
We'll just have to wait and see. It's that sort of year.
May was a bad month for another housing indicator: new home starts, which fell 10 percent compared with April, according to the Commerce Department's latest estimates. But starts were still up vs. a year earlier.
By the way, you all have been having a lively discussion this week about the state of the housing market.
For instance, Wonk reader westside writes, "The fact that the Baltimore area market didn’t fall off a cliff like others now seems a mixed blessing. It was great we didn’t see the disaster scenarios that played out in Vegas, Orlando and other boom towns, but I almost wonder if falling off a cliff wouldn’t have spared some of those now barely treading water the uncertainty of being stuck in the current limbo. When your house drops 50% in value almost overnight you have no choice but to make peace with the fact that you’ll never find a conventional buyer and you either have to stay put or let it go into foreclosure. When you lose a few percent here and a few percent there every few months over the course of a couple years, as we have around here, the options aren’t as clear."