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  • August 21, 2008 at 12:11 PM #13628
    HarryBosch
    Participant

    Mortgage application volume hits multiyear low
    By STEPHEN BERNARD – 1 day ago

    http://ap.google.com/article/ALeqM5iGO3ptAO6a54_9bVj7EorgcgBWSQD92M1HLG0

    NEW YORK (AP) — Mortgage application volume fell last week to its lowest levels in nearly eight years, the Mortgage Bankers Association said Wednesday.

    The fall in application volume is the latest sign of a struggling housing market. On Tuesday, a Commerce Department report showed construction of homes and apartments fell in July to the lowest level in more than 17 years.

    And while fewer new homes are being built, fewer customers are also refinancing existing mortgages. A sharp drop in refinance volume in recent weeks has been the leading driver of declining application volume.

    The trade group’s application index fell to 419.3 during the week ended Aug. 15, its lowest level since the index hit 298.3 in December 2000, and a 1.5 percent decline from the prior week. Application volume is down 61 percent from its 2008 peak in February.

    The MBA’s index peaked at 1,856.7 during the week ending May 30, 2003, at the height of the housing boom. An index value of 100 is equal to the application volume on March 16, 1990, the first week the MBA tracked application volume.

    The survey provides a snapshot of mortgage lending activity among mortgage bankers, commercial banks and thrifts. It covers about 50 percent of all residential retail mortgage originations each week.

    Application volume fell despite a drop in interest rates as well. The average rate for traditional, 30-year fixed-rate mortgages fell to 6.47 percent during the week ended Aug. 15, from 6.57 percent the previous week.

    The average rate for 15-year fixed-rate mortgages, often a popular option for refinancing a home, fell to 5.99 percent from 6.17 percent. The average rate for one-year adjustable-rate mortgages fell to 7.07 percent from 7.15 percent.

    August 21, 2008 at 12:21 PM #259522
    peterb
    Participant

    Given the state of the housing market and the availability of credit, I’ve wondered what the market will do as demand dries up for mortgages at the same tims as they’re considered risky investments? I am starting to think that rates will have to come down to induce business, but perhaps they will demand stronger documentation and much bigger down payments to mitigate the risk?

    Anyone have some insight on this??

    August 21, 2008 at 12:21 PM #259819
    peterb
    Participant

    Given the state of the housing market and the availability of credit, I’ve wondered what the market will do as demand dries up for mortgages at the same tims as they’re considered risky investments? I am starting to think that rates will have to come down to induce business, but perhaps they will demand stronger documentation and much bigger down payments to mitigate the risk?

    Anyone have some insight on this??

    August 21, 2008 at 12:21 PM #259778
    peterb
    Participant

    Given the state of the housing market and the availability of credit, I’ve wondered what the market will do as demand dries up for mortgages at the same tims as they’re considered risky investments? I am starting to think that rates will have to come down to induce business, but perhaps they will demand stronger documentation and much bigger down payments to mitigate the risk?

    Anyone have some insight on this??

    August 21, 2008 at 12:21 PM #259716
    peterb
    Participant

    Given the state of the housing market and the availability of credit, I’ve wondered what the market will do as demand dries up for mortgages at the same tims as they’re considered risky investments? I am starting to think that rates will have to come down to induce business, but perhaps they will demand stronger documentation and much bigger down payments to mitigate the risk?

    Anyone have some insight on this??

    August 21, 2008 at 12:21 PM #259729
    peterb
    Participant

    Given the state of the housing market and the availability of credit, I’ve wondered what the market will do as demand dries up for mortgages at the same tims as they’re considered risky investments? I am starting to think that rates will have to come down to induce business, but perhaps they will demand stronger documentation and much bigger down payments to mitigate the risk?

    Anyone have some insight on this??

    August 21, 2008 at 12:58 PM #259736
    HarryBosch
    Participant

    I cant say I have any insight but I can provide one story.

    My nephew and his wife recently purchased their first house in Orange County a month ago. He works, has a degree and makes maybe $50K-$60K/year. His wife is working on her masters and is not working. They have no debt.

    But in order to buy their first-time home ($320K house) they had to have his parents as co-signers on the loan. I’m sure they did not put 20% down – something much less.

    I suspect there will be more co-signers for first time home buyers as we go forward. Unless prices continue to drop to the point that co-signers are not needed.

    August 21, 2008 at 12:58 PM #259750
    HarryBosch
    Participant

    I cant say I have any insight but I can provide one story.

    My nephew and his wife recently purchased their first house in Orange County a month ago. He works, has a degree and makes maybe $50K-$60K/year. His wife is working on her masters and is not working. They have no debt.

    But in order to buy their first-time home ($320K house) they had to have his parents as co-signers on the loan. I’m sure they did not put 20% down – something much less.

    I suspect there will be more co-signers for first time home buyers as we go forward. Unless prices continue to drop to the point that co-signers are not needed.

    August 21, 2008 at 12:58 PM #259798
    HarryBosch
    Participant

    I cant say I have any insight but I can provide one story.

    My nephew and his wife recently purchased their first house in Orange County a month ago. He works, has a degree and makes maybe $50K-$60K/year. His wife is working on her masters and is not working. They have no debt.

    But in order to buy their first-time home ($320K house) they had to have his parents as co-signers on the loan. I’m sure they did not put 20% down – something much less.

    I suspect there will be more co-signers for first time home buyers as we go forward. Unless prices continue to drop to the point that co-signers are not needed.

    August 21, 2008 at 12:58 PM #259543
    HarryBosch
    Participant

    I cant say I have any insight but I can provide one story.

    My nephew and his wife recently purchased their first house in Orange County a month ago. He works, has a degree and makes maybe $50K-$60K/year. His wife is working on her masters and is not working. They have no debt.

    But in order to buy their first-time home ($320K house) they had to have his parents as co-signers on the loan. I’m sure they did not put 20% down – something much less.

    I suspect there will be more co-signers for first time home buyers as we go forward. Unless prices continue to drop to the point that co-signers are not needed.

    August 21, 2008 at 12:58 PM #259839
    HarryBosch
    Participant

    I cant say I have any insight but I can provide one story.

    My nephew and his wife recently purchased their first house in Orange County a month ago. He works, has a degree and makes maybe $50K-$60K/year. His wife is working on her masters and is not working. They have no debt.

    But in order to buy their first-time home ($320K house) they had to have his parents as co-signers on the loan. I’m sure they did not put 20% down – something much less.

    I suspect there will be more co-signers for first time home buyers as we go forward. Unless prices continue to drop to the point that co-signers are not needed.

    August 21, 2008 at 5:11 PM #259783
    snail
    Participant

    A 60K/year income should not buy a 320K house, even with 20% down = its still more that 4 times annual salary. Lets say 20% tax, take home about $4000/month, his mortgage with taxes is about 50% of his net (Yes, I know you should use the gross income, but let be conservative here). What am I missing?

    August 21, 2008 at 5:11 PM #260037
    snail
    Participant

    A 60K/year income should not buy a 320K house, even with 20% down = its still more that 4 times annual salary. Lets say 20% tax, take home about $4000/month, his mortgage with taxes is about 50% of his net (Yes, I know you should use the gross income, but let be conservative here). What am I missing?

    August 21, 2008 at 5:11 PM #260079
    snail
    Participant

    A 60K/year income should not buy a 320K house, even with 20% down = its still more that 4 times annual salary. Lets say 20% tax, take home about $4000/month, his mortgage with taxes is about 50% of his net (Yes, I know you should use the gross income, but let be conservative here). What am I missing?

    August 21, 2008 at 5:11 PM #259978
    snail
    Participant

    A 60K/year income should not buy a 320K house, even with 20% down = its still more that 4 times annual salary. Lets say 20% tax, take home about $4000/month, his mortgage with taxes is about 50% of his net (Yes, I know you should use the gross income, but let be conservative here). What am I missing?

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