U.S. mortgage applications fell last week by the most since February, defying efforts by President Barack Obama’s administration to revive the housing market.
The Mortgage Bankers Association’s index of applications to purchase a home or refinance a loan dropped 19 percent to 444.8 in the week ended June 26 from 548.2 the prior week. The group’s refinancing gauge declined 30 percent to the lowest in seven months, while the index of purchases fell 4.5 percent.
Unemployment, which touched a 26-year high in May, and rising borrowing costs discouraged homeowners from refinancing, while a growing number of foreclosures sidelined potential buyers waiting for house prices to stop tumbling. Pending home sales showing contracts signed in May rose 0.1 percent, compared with a gain of 6.7 percent in April, the National Realtors Association said today.
What is amazing on this story is the unemployment rate only gets lip service as to why people are not buying homes.
One has to go all the way to U.K. press to see some figures on jobs.
US private employers sacked 473,000 workers in June, while mortgage applications hit a seven-month low, raising fears that America was not recovering from its recession as well as previously thought.
Private sector job losses, calculated by ADP Employer Services, were worse than the 393,000 that economists had predicted in a Reuters poll but not as bad as the 485,000 sackings in May.
Joel Prakken, chairman of Macroeconomic Advisers, whose firm worked on ADP's survey, said that he expected a further 800,000 to one million job losses this year.
It's an astounding disconnect. Focus on increasing interest rates, pages and pages of analysis on foreclosure inventories...
Hello? To buy a home one needs to have a stable job, ya know that thing to actually pay the mortgage?