Mortgage Rates Low - Applications Rise

The Mortgage Bankers Association reported that mortgage applications surged in the latest week to their highest level since late May, as home loan rates hover near multi-month lows and as prospective buyers try to take advantage of the $8,000 tax credit before it expires at the end of November. We’ve discussed the likelihood of a false bottom in the housing market, due to accelerated buying prior to the expiration of these tax credits, along with the Fed’s MBS purchases. There is talk of both the tax credit and the MBS purchase program being extended – but there’s no guarantee. In the meantime, it’s a good reason for First Time Homebuyers get off the fence, as recent stats show that many buyers are still unaware of the credit, or don’t understand what it means for them. The National Association of Realtors has started to run television commercials promoting the tax credit, which is likely helping increase awareness as well.