Economist's Commentary: July 30, 2008
Quick Take on the Economy: July 30, 2008
By Ken Fears
Mortgage Applications – Mortgage Bankers Association
- The purchase portion of the mortgage applications index fell 7.8%, from 335.6 to 309.5 and is 9.7% below the 4-week moving average. This week marks the third straight decline for the purchase portion of the index. Applications are off their pace from a month ago by 7.2%
- This week’s measure is the lowest reading since February 30, 2003.
What does this mean for Realtors® and consumers?
- This month’s steady increase in the average rate for a 30-year fixed rate mortgage has cut sharply into mortgage applications. Rates reached a weekly average of 6.63% last week according to Freddie Mac.
- With the signing of the of the housing relief legislation by President Bush this morning, the bond and mortgage markets are likely to feel some relief as risk pressure to the economy and housing market have been pressing up on yields in recent weeks.
- Rates may come down in the short-term, but they are likely to remain in the mid-6% range for the rest of the year.
- Sellers may be forced to make more price concessions in order to move their properties.
Daily Forecast Update
- NAR's monthly official forecast as of July 8 (28K PDF)
- GDP Q2: 1.8%
- GDP Q3: 1.9%
- Unemployment rate by election time: 5.8%
- Average 30-year fixed mortgage rate by mid-2009: 6.6%
- Average 30-year fixed mortgage rate in December: 6.7%
- The next Fed policy change: a rate hike in December 2008
This is one in a series of commentaries by the Research staff of the National Association of REALTORS®. Read more commentaries >
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