Preferred Financial Services, Inc reviews and analyzes the recently released Mortgage Application Data
Preferred Financial Services, Inc reviews and analyzes the recent Mortgage Application Data released by the Mortgage Bankers Association (MBA)….
Andover, Massachusetts May 28th 2010—Preferred Financial Services has analyzed and reviewed the recent mortgage related data released by the Mortgage Bankers Association (MBA). The data shows a steep drop in the Purchase Index while also showing a steep rise in the Refinance Index. The housing market continues to show vulnerability due to the economy and home prices are still not rebounding as expected. In fact, many hard hit markets are still seeing home values drop. This weakness is now becoming more evident as the federal tax credit for new homebuyers expires and people delay their home purchases until the economy improves.
The MBA released date for the week ending May 14th and some of the data was indeed eye opening. The most astounding number released was a 27.1 percent weekly drop in the seasonally adjusted Purchase Applications Index. This brought the index to its lowest point since early 1997. This index measures the volume of purchase applications being processed by lenders nationwide. The refinance Index, which measures the volume of mortgage refinance applications, rose 14.5 percent from the previous week which indicates a growing need for credit among current homeowners who are not in danger of defaulting on their mortgages. The sizable drop in the Purchase Index occurred even though the average 30 year fixed mortgage rate continued to drop, from 4.96% to 4.83% which is the lowest it has been since November 2009.
This data suggests that homeowners looking to refinance took advantage of the low interest rates while potential home buyers stayed away for a variety of reasons. The biggest is the end of the tax credit for home purchases. Economists predicted that the tax credit would only move demand forward not actually increase it and it seems as if they were correct. Homes that would have been bought in the upcoming summer were instead purchased in the spring so that the buyers could take advantage of the tax credit. Another reason for the steep drop could be attributed to the continued weakness in the job market for Americans. As long as wages don’t grow and job security remains elusive, home buyers will stay on the sidelines and wait until the economy recovers.
Preferred Financial Services is a debt reduction firm certified by the CFC (Center for Financial Certifications) and accredited by U.S.O.B.A. (United States Organizations for Bankruptcy Alternatives). Headquartered in Andover, Massachusetts, Preferred Financial Services has been a leader in the debt reduction industry since 2003. Preferred Financial Services has acquired some of the best experience in the industry over the past 7 years. In 2009 alone Preferred Financial Services reduced over $16.5 million worth of consumer debt for just $6.4 million, for a savings of about 60%- and over 2,900 accounts were settled on behalf of their clients.
For more information, please visit: www.pfsdebtrelief.com
Contact:
Stephan Tavernini
