Mortgage applications across the US are on the decline. The latest survey conducted by the Mortgage Bankers Association reveals that the mortgage applications declined 7.3% during the third week of February 2006. The corresponding index fell from 619.3 in the second week of February 2006 to 574.1 in the third week of February 2006. The index of home purchases declined 7.9% to 391.7, ebbing to its lowest levels since December 2005.
The key reason for this decline is home mortgage interest rates that have crawled up significantly leading to higher monthly payouts for customers. This has dampened the demand for realty and home mortgage loans.
Interest rates are expected to increase further during the year, which will act as a further decelerator for the already dampened realty markets.
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