Mortgage Companies Face “Tremendously Difficult” Year As Housing Recovery Crumbles
The topic of the false recovery in the US housing market has seldom been far from these pages but it seems both the mainstream media and the actual businesses on the ground are seeing that extrapolating dead-cat-bounces and easy-money bubbles (once again) ends in tears. As WSJ reports, mortgage lending declined to the lowest level in 14 years in the first quarter as homeowners pulled back sharply from refinancing and house hunters showed little appetite for new loans, the latest sign of how rising interest rates have dented the housing recovery. The decline shows how the mortgage market is experiencing its largest shift in more than a decade as an era of generally falling interest rates that began in 2000 appears to have run its course… and the marginal potential refinancer has hit their limit.
As The Wall Street Journal reports, lenders originated $235 billion in mortgage loans during the January-March quarter, down 58% from the same period a year ago and down 23% from the fourth quarter of 2013, according to industry newsletter Inside Mortgage Finance.
The decline shows how the mortgage market is experiencing its largest shift in more than a decade as an era of generally falling interest rates that began in 2000 appears to have run its course. The average 30-year fixed-rate mortgage stood at 4.5% last week, up from 3.6% last May, when interest rates shot up in reaction to the Federal Reserve’s initial indication that it might reduce a bond-buying campaign that was, in part, designed to keep a lid on long-term rates like mortgages.
The decline in mortgage lending last quarter stemmed almost entirely from the slide in refinancing.
The hope is fading fast…
More here…
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Diane Sawyer said on her news tonight folks are in a bidding war for houses and some are bidding as much $200,000.00 more than the asking price. Why is there such a difference in her reporting and this from you?
I wonder if a clear title is being given on houses sold today?
Are we in crazy times or what????
Diane Sawyer is in NYC and there is indeed a bidding war there … Russians and other wealthy Europeans are buying real estate there for cash.. The only other boom area is in the counties surrounding Washington D.C. because of the boom times for government employees who on average make double what their contemporaries make and for less work.