Mortgage Applications in Increase in Biggest Advance

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					Mortgage Applications in U.S. Increase 16% in Biggest Advance Since
June
10 Mar 2011
Mortgage applications in the U.S. rose last week, reflecting gains in purchases and refinancing that signal the
housing market may be stabilizing.


The Mortgage Bankers Association’s index of loan applications surged 16 percent in the week ended March 4,
the biggest gain since June. The measure fell 6.5 percent in the previous period that included the Presidents’
Day holiday. The group’s purchase index climbed 13 percent last week, the most since November, while its
refinancing gauge jumped 17 percent.


As the jobless rate eases and companies ratchet up hiring, more Americans may look to buy houses, stabiliz-
ing the industry that triggered the recession. At the same time, a growing number of foreclosed properties
continues to depress prices and may hamper the housing recovery.


“The housing market in the U.S. still has a lot of challenges ahead of it,” Michael Gregory, a senior economist
at BMO Capital Markets in Toronto, said before the report. “Ultimately it’s all about how many homes still are
going to hit the market. People don’t want to buy homes because they feel prices could fall further.”


The average rate on a 30-year fixed loan increased last week to 4.93 percent from 4.84 percent. Borrowing
costs have been moving up after reaching 4.21 percent in October, the lowest since the group’s records
began in 1990.


The average rate on a 15-year fixed mortgage held at 4.17 percent.


The share of applicants seeking to refinance a loan rose to 65.5 percent last week from 64.9 percent the prior
week.


Highest Level

Purchases of new houses fell 13 percent in January, Commerce Department figures showed on Feb. 24.
Sales of previously owned homes, which make up more than 90 percent of the market, climbed to the highest
level in eight months, led by rising demand for distressed properties, according to the National Association of
Realtors.


The drop in new-home sales is slowing construction. Hovnanian Enterprises Inc. (HOV), the largest home-
builder in New Jersey, reported on March 1 a first-quarter loss after a drop in sales and the absence of a tax
benefit that boosted results a year earlier.


The loss was $64.1 million, or 82 cents a share, for the quarter ended Jan. 31, the Red Bank-based company

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                    you obtain independent professional financial and/or legal advice relevant to your own personal circumstances.
said in a statement. That compared with a profit of $236.2 million, or $2.97, a year earlier, when results
included a $291 million tax gain.


“We need confidence to go up,” Chief Executive Officer Ara Hovnanian said March 2 during a call with
analysts. “We need employment numbers to get better, and I think that’ll attract traffic as well as customers.”


The S&P/Case-Shiller index of home values in 20 cities fell 2.4 percent in December from a year earlier, the
biggest 12- month decrease since December 2009. Prices were down 31 percent from their peak in July 2006,
the data showed on Feb. 22.




 All plans, models, promotional material, projections, estimates and working examples provided are intended for general information purposes only.
 No representation or warranty - either express or implied is provided in relation to the accuracy of such information provided. We recommend that
                    you obtain independent professional financial and/or legal advice relevant to your own personal circumstances.

				
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