We know this is going to come as a great surprise (hope you sense the sarcasm), but the mortgage applications have suddenly dropped. The drop is reportedly do to the tax breaks expiring from the Federal Government. Here are the words
“Purchase applications plummeted 27 percent last week and have declined almost 20 percent over the past month, despite relatively low interest rates. The data continue to suggest that the tax credit pulled sales into April at the expense of the remainder of the spring buying season. In fact, this drop occurred even as rates on 30-year fixed-rate mortgages continued to fall, and at 4.83 percent are at their lowest level since November 2009,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “However, refinance borrowers did react to these lower rates, with refi applications up almost 15 percent, hitting their highest level in nine weeks.
Source: Yahoo Finance
I mean really, what did everyone expect. When the Government gives you $9,000 cash to buy a home, what did you think was going to happen when the $9,000 ran out? People would stop buying homes. They cannot afford it anyway, but that money was too much for people to pass up because they knew it wasn’t going to last forever. So, when they pulled the plug on the federally funded financing program, this is what it lead to.
We know there were not a lot of beginning investing going on and taking advantage of this money, but still people were out there buying their first home or moving up in homes to take advantage and all of that is over with now. Even with the mortgage interest rates at historic lows, they still cannot get people into banks and mortgage offices to file for loan approvals, which just shows that we are still in a very fragile market and you better stop listening to these liars that are saying that the worst is behind us. It is not.
What’s Next in the real estate and financing prop up?
This is just my opinion, but I think the Government is going to bring back the $9,000 housing credit to buyers. They have to. The market is still too fragile to be leaning on it to right itself. We are still making too many mistakes and not being real with our situation to allow for this to happen, so they must continue to artificially manufacture the market until things turn around.
What do you think will happen?
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