It has suddenly become less financially attractive to take out a new mortgage or refinance an existing one. That should add another boat anchor to the housing market already weighed by high foreclosure rates, defaults, falling prices in most regions, and over 10 million underwater home loans.
The Mortgage Bankers Association reports that
The average contract interest rate for 15-year fixed-rate mortgages increased to 4.21 percent from 3.98 percent, with points increasing to 1.28 from 0.97 (including the origination fee) for 80 percent LTV loans. This is the highest 15-year fixed-rate observed in the survey since the beginning of June 2010
The rate and a market slowed by problems with bank methods in the foreclosure process helped push down mortgage activity in general. It may be that the numbers are also effected as the year moves toward the holidays.
The Refinance Index decreased 0.7 percent from the previous week. This is the fifth straight weekly decline for the Refinance Index. The seasonally adjusted Purchase Index decreased 5.0 percent from one week earlier. The unadjusted Purchase Index decreased 8.6 percent compared with the previous week and was 16.6 percent lower than the same week one year ago.
The housing market remains in deep trouble despite multiple efforts by the federal government, many of which have failed. The Congressional Oversight Committee recently said that the HAMP plan to keep people in their homes had only aided 750,000 people since is started–about one-quarter of its goal.
Douglas A. McIntyre
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