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Daily Real Estate News  |  October 21, 2009  |   Mortgage Activity Plummets
Mortgage applications plunged last week as rates moved higher and concerns mounted about the expiration of the home buyer tax credit.

The Mortgage Bankers Association said its index of mortgage application volume fell 13.7 percent last week over the prior week.

The decline came as rates on the widely-used 30-year fixed mortgage increased to 5.07 percent from 5.02 percent, according to the MBA. The week's adjustments included the Columbus Day holiday.

Uncertainty about a possible extension and expansion of an $8,000 tax credit for first-time home buyers may be hampering the housing recovery. Deals must close by Nov. 30 for buyers to be eligible for the credit.

The MBA said refinancing applications also fell, by 16.8 percent from the previous week. The purchase index, a measure of applications at mortgage lenders, declined 16.7 percent last week.

Interest rates rose last week across the board:

  • 30-year fixed-rate mortgages increased to 5.07 percent from 5.02 percent.
  • 15-year fixed mortgages rose to 4.51 percent from 4.44 percent.
  • Rates for one-year adjustable rate mortgages, or ARMs, jumped to 6.86 percent from 6.71 percent.

Source: CNNMoney.com, Julianne Pepitone, and the Mortgage Bankers Association (10/21/09)

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