Economist's Commentary: September 10, 2008

Quick Take on the Economy: September 10, 2008

By Wannasiri Chompoopet, Manager of Housing Statistics

Every Wednesday the Mortgage Bankers Association (MBA) releases information on a subscription-based survey covering application activity for fixed rate, adjustable rate, conventional and government loans for home purchases and refinances activity of the prior week.
The purchase portion of the mortgage applications index increased 6.4%, from 349.0 to 371.5 for the week ending September 5, 2008. The level of the increase came from the Conventional Purchase Index which increased 14.4 percent, which offset the decrease in the Government Purchase Index (largely FHA) that declined 8.7 percent.
This week's increase is the fourth consecutive increase.

Consecutive rises in mortgage applications signal that buyers are returning to the market, possibly at a moderate pace but still in numbers that can be measured. While it may take some time for consumers to absorb recent positive housing news, affordable home prices, the still historic low mortgage rates - and a large selection of existing inventory - are already attracting the fence sitters.

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