Overall home purchase loan applications increased over seven percent; of those loans , over ten percent were fro FHA loans.
This increase is largely due to the lowest mortgage rates in nearly 20 years. Rates on 30-year, fixed loans have averaged almost 5 percent, while the rate on a 15-year fixed loan fell to only 4.5%.
This is a key indicating factor of a recovering market because an increase in loan applications reflects to an obvious increase in home sale contracts, and increased escrow closings in the near future. This activity also indicates that home prices in many areas have reached a point of true affordability; now attracting would-be home buyers who were as of only a few months ago still on the fence regarding whether or not to make a purchase.
Another strong influential factor is the recent enactment by Congress of the home purchase tax credit which is now available through the end of this year to all persons who have not purchased a home within the past three years. The maximum credit is $8000. A major enhancement is that it is now not repayable.
These are all positive indicators that the market is headed in the right direction. The reality remains that unemployment continues to increase and the available inventory of properties continue to be both foreclosures and short-sales. However, even amongst these major negative factors, there is some hope. Upon closer inspection, across the country the highest number of distressed properties available on the market is in a relatively small number of counties. Over 50% of the country's foreclosures in 2008 were found in only thirty five counties in only 12 states. These areas are California, Phoenix, Florida and Las Vegas.
In over 650 other counties around the country, approximately one fifth of all markets, foreclosure numbers actually decreased since 2006.
|
