MBA: Mortgage Purchase Applications Steady
Submitted by
CalculatedRisk on Wed, 03/01/2006 - 7:31am (7 comments)
Shopping at Amazon?
Wait! If you click this link
Open predictions
Our local book authors
User login
Who's online
There are currently 29 members and 145 guests online.
Recent Recommendations
CR,
The purchase index is down more than 20% from its peak. If that translates to a similar decline in existing home sales and new home completions (not sales), then we are looking at a 6.2 million number for existing single family home sales + new single family completions, down from a peak of 8 million. Currently we are running at about 7.4 million. If we dropped to 6.2 from here that is quite a drop. I dont think the markets are anticipating that kind of a drop.
Rates at the long end are down, but rates at the front end are up - naturally. The ARM share of mortgages is down considerably, though not nearly back at the share seen in the 1998-early 2004 period. The decline in share is a good thing, but I wonder why anybody is borrowing through ARMs to save roughly 50 bps, at most.
The 30FRM to 1ARM spread is ~ 90bps.
Interest Rate Trends ~ Historical Graphs for Mortgage Rates
I'll tell you who is going ARM instead of fixed. I am. It saves me $18,000/yr
HW, the 50bp spread that k harris cites is about right, yes? The benefit of a fixed rate seems so inexpensive, downright cheap --until you come up with $18,000/ year.
I used to think that only speculators would turn the fixed mortgage down. Then I thought only serious speculators would. Then I thought only desperate speculators would.
Can you supply some more details?
Calmo, look at the graphs I linked to and see when a 30yr FRM has ever been as cheap as a 1yr ARM is today, or even back through '02. The answere is essentially "never".
Nothing is obvious to me except: Markets work on fear & greed, AND the dumbing down of America is indisputable. Gamble away folks, but you're doing your families an extreme disservice if you're calling what you're doing wise.