Mortgage Applications & Current Interest Rates
Mortgage applications fell again last week as average 30-year rates held relatively flat at 5.00%. Refinancing activity was much higher back when rates were below 5.0%, which you would expect. Now, refinancing activity is at somewhat “normal levels.” Purchases, however, are sinking as well and hit their lowest level since May 2009. It seems natural though that purchase applications would sink seeing as the tax credit for first-time homebuyers is essentially over now with no time for potential buyers to get deals done before the deadline. Locally however, the $8,000 tax credit did not appear to help many buyers in the Northeast areas of Los Angeles. Even though property values are lower than in past years, an income of over $75,000 is usually required to purchase a home in this area. The latest update from Capitol Hill is that the Democrats have agreed on a tax credit proposal that would extend through next spring. The updated program would be a 10% tax credit (up to a maximum of $7,250), but would also include buyers who are not first-time homeowners and have higher incomes. Hopefully, this plan along with low interest rates would stimulate purchase activity again.
Currently the rate for the 30 year fixed is 4.875% with one point. At Northeast Financial, if you prefer not to pay a point you may be able to qualify for a “no points” loan at 5%.
To find out if you qualify I invite you to call Joe Elizondo of Northeast Financial at (323) 256-7833 or email Joe at neast-financial@sbcglobal.net