Silver lining breaking through in Housing

We seem to have a few silver linings breaking through the rain clouds of housing news.  Reports out today show               pending home sales rose unexpectedly in February as well as mortgage loan applications.

The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in February, increased 2.1 percent to 90.8.  Economists had expected the index, which leads existing home sales by a month or two, to fall 1.0 percent after a previously reported 2.8 percent decline.  This report when compared to February last year, the index was down 8.2 percent, perhaps we will be going in to Spring with a spring showers instead of the winter blues.

On another upbeat note:

There was a rise Mortgage applications by 2.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending March 18, 2011. The Market Composite Index—a measure of mortgage loan application volume—increased 2.7 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 2.8 percent compared with the previous week. The Refinance Index increased 2.7 percent from the previous week while the seasonally adjusted Purchase Index increased 2.7 percent from one week earlier.  The unadjusted Purchase Index increased 3.0 percent compared with the previous week and was 15.3 percent lower than the same week one year ago.

OK!  That was a lot of numbers I just put in there, what is really says is that we are seeing slight increases in loan applications as well as pending home sales.  Now we just need to see an increase in First Time Home Buyers stepping into the market to take advantage of the great deals out there in both homes and interest rates.  Lending programs are not as restrictive as they were 3 years ago.

FHA is great for the First Time Home Buyers.  Rates are lower than 30 year fixed conventional.  What will be interesting will be the way the Frank Dodd Act Mortgage Reform effects rates.  I will touch more on that in my next blog.

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Robin Weirich CBW

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