Has the number of home loan applications fallen in the Bay Area?
The incentive for home buyers – first time buyers and repeat buyers – by way of tax credit has expired on 30th April. The federal government tried hard by the foreclosure mitigation programs one by one, to help the housing market recover. The success or failure of these programs has been a point for debate, but the fact remains a portion of the American distressed home owners benefited by it.
On the official statistics part, the U.S. Treasury Department and the Department of Housing and Urban Development (HUD) have stated in their official release of data for April 2010 that under the Home Affordable Modification Program (HAMP), the permanent loan modifications have reached almost 300,000 troubled home owners – an increase of 68,000 or nearly 13 percent over the month of March.
Now that the mortgage interest rates have touched an all-time low – 4.72 percent on an average for a 30 year-fixed mortgage – market watchers expected that there will be upsurge in home loan applications. A steady campaign by the Federal Reserve to reduce borrowing costs for consumers has done this pushing down of mortgage rates, to extraordinary low levels last year. Actually the rates were expected to rise after the government program ended this spring, but have fallen instead in the last two months.
Has the down-level mortgage rates pushed up housing market activity? The national index of the Mortgage Bankers Association says those applying for a mortgage towards buying home fell to the lowest levels in 13 years, as per records last week and down by 35 percent from the previous month.
But local reports in the Bay Area are different. Cindy Romero-Lowary, a loan officer with the Pleasanton office of Cherry Creek Mortgage says that she haven’t seen a drop off in purchase home loans; Low prices for homes are a bigger factor for buying than today’s low-interest rates; People are going out and purchasing homes regardless of what the interest rate is.
Karen Mayfield, Bay Area regional manager for mortgage banking at Bank of the West, San Francisco, says "People who did not have enough equity to qualify in the fall of 2009 may now qualify. Prices have stabilized and in some cases increased.”
Posted by Amitesh Kumar
on Jun 14 2010. Filed under Housing, Lending.
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