Washington Business Journal - by Tucker Echols Staff Reporter
Recent enthusiasm for the housing market is waning. The latest reports show mortgage applications and new home construction on the decline.
The Mortgage Bankers Association announced Wednesday that its index of applications fell 2 percent for the week ended Nov. 13 as purchase applications tumbled to a 12-year low.
Now that President Barack Obama has signed an extension of the home buyer’s tax credit through next April, some analysts think mortgage activity will pick up.
Home builders are more cautious. The Commerce Department announced Wednesday that new home starts plunged nearly 11 percent last month to an annual rate of 529,000. That is the lowest level since April and came despite predictions for a gain in starts. The Commerce Department said that building permits, a sign of future construction activity, also declined.
Breaking down the mortgage activity report, the index of home purchase applications sank nearly 5 percent last week to the lowest level since November of 1997 while refinance applications eased 1 percent even as refinancing expanded its majority of mortgage activity. Refinance applications grew last week to 72.9 percent of all applications from 71.5 percent the week before.