MBA Reports Decrease in Year-End Mortgage Demand
Data released by the Mortgage Bankers Association (MBA) Wednesday showed a decrease in demand for housing loans and refinances to close out 2011. The data, covering the last week of 2011 is quite unsettling for many analysts, given that mortgage rates have been on the decline as of recent weeks.
According to the MBA’s statistics, the number of mortgage applications in America decreased by 4.1% in the week of December 24-30 despite the average rate for a 30-year mortgage dropping to 4.07%.
This figure marked the lowest going mortgage rates for the whole of 2011, and is significant lower than 2010’s year-end figure of 4.82%. In addition, there was a drop of close to 10% reported for purchase loan applications and 2.5% for refinancing.
As a result of the significant decrease in mortgage rates, many American homeowners have resorted to refinancing their property. As a whole, this figure rose by over 60 percent in the recently concluded year. It must be stressed, though, that continuing concerns over the US economy and unemployment rates contributed to the lack of demand for new home loans in 2011.
MBA representatives are not expecting the mortgage industry to make a speedy recovery in 2012. MBA research and economics vice president Michael Fratantoni stated that changes in FHA insurance premiums and guarantee fees for GSE loans are not likely to impact mortgage activity until February 2012 at the earliest.
Generally speaking, financial experts and executives are more optimistic about the start of 2012 as compared to the previous year. However, they warn that the surplus of unsold property and political uncertainty due to the upcoming presidential elections might impact mortgage figures negatively as the year progresses.
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