The U.
S.
real estate market isn't exactly in the best shape due to the subprime crisis and large number of foreclosures.
The debt ceiling situation and S&P's recent downgrade of U.
S credit isn't helping either.
In addition, the job market is still recovering and thousands of Americans are unemployed or unable to secure permanent employment.
International crisis such as the situation in Libya and Syria have Americans worried about the future of the world as well as high gasoline costs.
All of these factors affect the real estate market.
Chaos can be very unsettling and the world is filled with chaos.
As a result, Americans are hesitant about investing a large sum of money in a mortgage.
Although interest rates are still relatively low, the value of housing continues to go down, foreclosures continue to rise and people, are just plain afraid to take the plunge and buy a new home.
Our nation is becoming a country of renters; the percentage of American families who own a house has decreased drastically.
The Mortgage Bankers Association (MBA has announced that the purchase index for new mortgages is at its lowest point in 15 years as of the week ending August 19.
The Market Composite Index, a manner in which the federal government measures the mortgage application level, has dropped 2.
4 percent from the previous week taking account of seasonal adjustments.
Not considering the seasonal adjustment, the index fell 2.
9 percent.
Another segment of the market which has also been hit is the Refinance market although it hasn't been hit nearly as hard as the new mortgage sector.
The Refinance Index fell 1.
7 percent.
However, over seventy nine percent of all mortgage applications are related to refinancing.
That is an increase of 1 percent, the highest percentage increase since November 2010.
The adjustable rate mortgage (ARM) share of activity jumped 6.
2 percent from 5.
8 percent of total applications the previous week.
Surprisingly, many investors are still buying tons of U.
S bonds because they are still considered a very safe investment.
This is rather surprising because U.
S credit has just been downgraded.
Experts actually predicted that interest rates would increase significantly.
Will interest rates rise in the future? All indicators point toward affirmative.
The average contract interest rate for a 30-year fixed-rate mortgage rose to 4.
39 percent from 4.
32 percent.
Certainly, only a modest increase, but an increase nevertheless when considering how interest rates were falling.
The average interest rate for a 15-year fixed-rate mortgage jumped to 3.
56 percent from 3.
47 percent.
Jumbo loan applications also decreased by more than fifteen percent.
This is probably because the government changed the loan limits on jumbo loans.
We also saw a significant drop in mortgage applications for housing programs sponsored by the government; these dropped to over 8 percent.
The MBA index covers more than 50 percent of all retail residential mortgage applications in the U.
S.
The index surveys mortgage bankers, commercial banks, and thrifts.
Analysts point to the volatility in the secondary mortgage markets as the cause for potential mortgage rate increases.
However, if you are interested in buying a home, now is still a good time since rates are low.
Only time will tell how this will play out.
Hopefully the market will recover soon.
S.
real estate market isn't exactly in the best shape due to the subprime crisis and large number of foreclosures.
The debt ceiling situation and S&P's recent downgrade of U.
S credit isn't helping either.
In addition, the job market is still recovering and thousands of Americans are unemployed or unable to secure permanent employment.
International crisis such as the situation in Libya and Syria have Americans worried about the future of the world as well as high gasoline costs.
All of these factors affect the real estate market.
Chaos can be very unsettling and the world is filled with chaos.
As a result, Americans are hesitant about investing a large sum of money in a mortgage.
Although interest rates are still relatively low, the value of housing continues to go down, foreclosures continue to rise and people, are just plain afraid to take the plunge and buy a new home.
Our nation is becoming a country of renters; the percentage of American families who own a house has decreased drastically.
The Mortgage Bankers Association (MBA has announced that the purchase index for new mortgages is at its lowest point in 15 years as of the week ending August 19.
The Market Composite Index, a manner in which the federal government measures the mortgage application level, has dropped 2.
4 percent from the previous week taking account of seasonal adjustments.
Not considering the seasonal adjustment, the index fell 2.
9 percent.
Another segment of the market which has also been hit is the Refinance market although it hasn't been hit nearly as hard as the new mortgage sector.
The Refinance Index fell 1.
7 percent.
However, over seventy nine percent of all mortgage applications are related to refinancing.
That is an increase of 1 percent, the highest percentage increase since November 2010.
The adjustable rate mortgage (ARM) share of activity jumped 6.
2 percent from 5.
8 percent of total applications the previous week.
Surprisingly, many investors are still buying tons of U.
S bonds because they are still considered a very safe investment.
This is rather surprising because U.
S credit has just been downgraded.
Experts actually predicted that interest rates would increase significantly.
Will interest rates rise in the future? All indicators point toward affirmative.
The average contract interest rate for a 30-year fixed-rate mortgage rose to 4.
39 percent from 4.
32 percent.
Certainly, only a modest increase, but an increase nevertheless when considering how interest rates were falling.
The average interest rate for a 15-year fixed-rate mortgage jumped to 3.
56 percent from 3.
47 percent.
Jumbo loan applications also decreased by more than fifteen percent.
This is probably because the government changed the loan limits on jumbo loans.
We also saw a significant drop in mortgage applications for housing programs sponsored by the government; these dropped to over 8 percent.
The MBA index covers more than 50 percent of all retail residential mortgage applications in the U.
S.
The index surveys mortgage bankers, commercial banks, and thrifts.
Analysts point to the volatility in the secondary mortgage markets as the cause for potential mortgage rate increases.
However, if you are interested in buying a home, now is still a good time since rates are low.
Only time will tell how this will play out.
Hopefully the market will recover soon.