U.S. mortgage applications for home purchases rose to their highest level in more than six months last week, buoying activity otherwise weighed down by waning refinancing, an industry group reported on Wednesday.

The Mortgage Bankers Association’s seasonally adjusted purchase applications index jumped 14.4 percent to 205.0 in the week ended Nov. 19, the highest since the week ending May 7, the MBA said on Wednesday. The refinancing index slumped 1 percent to 3,793.6.

The composite index, which includes loans for home purchases and refinancings, increased 2.1 percent to 728.8, the MBA said.

“The increase in purchase applications last week aligns with other incoming data suggesting that consumers are feeling somewhat more confident with their financial situation,” Michael Fratantoni, the MBA’s vice president of research and economics, said in a statement.

Reuters

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However, standards continue to tighten on prime mortgages and home-equity loans, particularly at smaller institutions. The October 2010 Senior Loan Officer Opinion Survey on Bank Lending Practices addressed changes in the supply of, and demand for, bank loans to businesses and households over the past three months.

The October survey indicated that, on net, banks eased standards and terms over the previous three months on some categories of loans to households and businesses.

Both large and other domestic banks reported having eased some standards and terms; large banks were primarily responsible for the easing reported in July.

However, substantial fractions of banks reported in response to a set of special questions that standards for many categories of loans would not return to their longer-run averages for the foreseeable future.

Domestic survey respondents reported easing standards and most terms on C&I loans to firms of all sizes. As in the April and July surveys, banks mainly pointed to a more favorable or less uncertain economic outlook and increased competition from other banks or nonbank lenders as reasons for easing. Of the few banks that reported h

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The MBA mortgage applications index jumped 14.6% to 897.2% for the week ending October 8. This was the first increase in 6 weeks for the largest rise since mid-June and its biggest since May 2009. Mortgage activity is 20.8% up year over year. Refinances jumped 21.0% on the week and is up 50.0% from a year ago. Refinancing is more than 80% of total new mortgage activity.

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Interest rates continue to hit new lows. The 15-year FRM averaged 3.72 percent (0.7 point), dropping from 3.75 percent last week. The 5-year adjustable-rate mortgage (ARM) came in at 3.47 percent this week (0.6 point). It was 3.52 percent last week.

Frank Nothaft, VP and chief economist for Freddie Mac, explained, “The 12-month growth rate in the core price index for personal consumption, which the Federal Reserve closely tracks, has been drifting lower over the past six months ending in August and suggests inflation is running at a tepid pace at best. This allowed mortgage rates to ease.” http://www.dsnews.com/articles/mortgage-rates-continue-descent-hitting-new-record-lows-2010-10-07

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Thirty-year fixed mortgages slipped to 4.27 percent this week, the lowest on records dating back to 1971, from 4.32 percent last week.

A drop in interest on 15-year loans to 3.72 percent from 3.75 percent, meanwhile, was the lowest on records dating back to 1991. Freddie Mac also reported that the five-year adjustable-rate mortgage fell to 3.47 percent from 3.52 percent last week, and the one-year ARM dropped to 3.40 percent this week from 3.48 percent.

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Miami, FL

Total cumulative pending home sales – including single-family homes and condominiums – in Broward County increased 17 percent in August 2010 compared to August 2009, from 6,705 to 7,845, and increased .19 percent, up from 7,830, compared to the previous month according to the MIAMI Association of REALTORS and the Southeast Florida Multiple Listing Service (SEFMLS).

Contrary to national trends, which show near-term home sales noticeably lower since the expiration of the homebuyer tax credit, the South Florida real estate market continues to strengthen, primarily due to the highest concentration in the U.S. of international buyers.

Pending condominium sales in Broward fared better than that of single-family homes. Broward County pending condominium sales in Augustwere 27.4 percent higher than they were in August 2009, up from 3,414 to 4,350, and were .625 percent higher than the previous month, up from 4,323.

“We are optimistic about signs of stability in the Broward marketplace,” said Terri Bersach, 2010 president of the Broward County Board of Governors of the MIAMI Association of REALTORS. “Buyers should take advantage of low interest rates and record affordability.”

Compared to August 2009, Broward pending sales of single-family homes rose 6.2 percent, from 3,291 to 3,495, and decreased .342 percent, down from 3,507, compared to the previous month.

International Buyers Strengthen Broward Market
Home sales in South Florida have increased dramatically since August 2008, and home prices continue to stabilize. South Florida, where an estimated 60 percent of sales involve a foreign buyer, continues to be the top area in the nation for international buying activity.

“With pristine beaches, a great quality of life and affordable pricing, Broward County continues to be a huge draw to foreign buyers,” said Natascha Tello, president-elect of the Broward County Board of Governors of the MIAMI Association of REALTORS. “These buyers are instrumental in helping to strengthen the South Florida real estate market.”

A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing. Increased pending sales are an indication of increased future sales. The MIAMI Association of Realtors reports the cumulative number of pending sales.

MIAMI Association of REALTORS
The MIAMI Association of REALTORS was chartered by the National Association of Realtors in 1920 and is celebrating its 90th year of service to Realtors, the buying and selling public, and the communities in South Florida. Comprised of four organizations, the Residential Association, the Realtors Commercial Alliance, the Broward County Board of Governors, and the International Council, it represents 23,000 real estate professionals in all aspects of real estate sales, marketing, and brokerage. It is the largest local association in the National Association of Realtors, and has partnerships with more than 60 international organizations worldwide. MIAMI’s official website is www.miamire.com.

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The Mortgage Bankers Association said Wednesday its refinancing index jumped 17% to 4676.70 in the week to Wednesday, soaring to the highest since May 2009. The four-week average increase rose to 3.2%. This abrupt spike is a sign that mortgage rates have fallen far enough to incentivize a new wave of refinancing from homeowners. According for Freddie Mac, the average rate for a 30- year home loan dropped to 4.4A% last week.

This wave could also be a great sign for the U.S. economy as a whole, not just the housing market. Morgan Stanley estimates that if 50% of mortgages in mortgage-backed bonds are refinanced, it would free up $46 billion a year for consumers. $46 billion is more money than the last extension of unemployment benefits.

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New home sales jumped 23.6% in June to an annual rate of 330k compared to market expectations for a somewhat smaller increase to a rate of 320k. Also, the S&P/Case-Shiller 20-city home price index increased 0.5% in May from April and 4.6% from May one year ago. This was the second monthly increase and the fourth year-over-year gain in home prices. 15 of the 20 metro areas tracked by this index showed monthly price gains.

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Total pending home sales in the Miami-Dade County increased 40.5 percent in July 2010, when compared to the July 2009 numbers. This real estate  includes single-family style homes and condominiums. Even though the tax credit, which helped boost the South Florida real estate market, expired, Miamia-Dade Couny has shown impressive signs as it continues to strengthen.

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“As the leading advocate for private property rights, NAR believes it is critical for Congress to act soon and to get capital flowing to small businesses and to the commercial real estate market,” Jim Helsel, treasurer of the National Association of Realtors, told the House Committee on Financial Services. He explained that raising the SBA loan limits and allowing the SBA 504 loans to be used to refinance property can help ease the liquidity crisis in the commercial sector. He went on to articulate that the NAR strongly supports the H.R. 3380 because it is projected to raise the credit union member business lending cap from 12.25 percent to 25 percent of total assets. Small regional and community banks make up for close to half of the small business loans issued in the United States. Needless to say, available credit unions increase the credit accessible by small businesses.
Source: NAR

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