Demonstrating that the four mortgage lenders foreclosure moratoriums count, applications for home mortgages dropped 10.5% last week, according to the Mortgage Bankers Association. Applications for refinances dove 11.2%, while purchase money applications for new home mortgages were down 6.7%.
The expiration of the federal home buyer tax credit coupled with the foreclosure freeze put in place by Bank of America, JP Morgan Chase & Co., Ally Financial and PNC Financial were enough to turn home sales sluggish in many areas of the country.
However, BofA and GMAC have removed moratoriums in 23 states where judicial rulings are required on foreclosures after reviewing paperwork, according to company officials. The move should act to re-stimulate home sales in many areas of the country.
The average contracted interest rate for a 30-year fixed rate mortgage increased to 4.34% from 4.21%, with points decreasing to 0.81 from 1.02, indicating that mortgage rates may be on their way up after bottoming last week. It’s the first rise in 30-year fixed contracted rates in six weeks. The 15-year fixed rate contracted mortgage also moved higher from 3.62% to 3.74% during the week with points dropping to 1.00 from 1.06. The jump also represents the first rise in a month and a half.
The four week moving average for residential mortgage applications, however, made a minor move up for the month, rising a slim 0.4%. Refinances remain as the wholly dominant portion of the mortgage financing market, compiling 82.4% of business. Refinances have remained as the anchor of the mortgage market since the beginning of the year as interest rates remain at or near record low levels.