Mortgage Applications Decrease

This actually contains some good news for the California mortgage market. Applications for ARMs fell to their lowest in a year. This might signal the a cool down in over heated markets like California and Florida.

Applications for U.S. home mortgages fell last week amid a modest rise in rates on fixed 30-year loans, while demand for adjustable-rate mortgages (ARMs) fell to its lowest level in over a year, an industry trade group said on Wednesday.

The Mortgage Bankers Association said purchasing and refinancing activity dropped during the holiday-shortened week ending July 8, after surging the previous week.

The MBA's seasonally adjusted index of mortgage application activity decreased 7.2 percent to 791.9, nearly erasing all of the previous week's 9.6 percent gain.

On a four-week moving average, the index is down 2.9 percent from 826.4 to 802.6.

Fixed 30-year mortgage rates averaged 5.62 percent last week, excluding fees, up 4 basis points from 5.58 percent the previous week."

And in what will undoubted continue to cool the real estate market further. Rates are projected to continue rising slowly.

Applications for adjustable-rate products experienced an even steeper decline of 15.8 percent, according to Michael Cevarr, MBA's director of member surveys.

"As a result, the ARM share of applications, at 27.9 percent, is at its lowest level since March of 2004," he said in a press release.

The ARM share of activity stood at 30.7 percent the week before. The drop was also against the backdrop of lower rates on one-year ARMs, which fell to 4.56 percent from 4.60 percent the prior week.

Thank Goodness.
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