Mortgage Applications Fall 19 Percent

2009 July 1

July 1 2009 - Mortgage applications in the U.S. fell last week by the most since February, defying efforts by President Barack Obama’s administration to revive the housing market.

The Mortgage Bankers Association’s index of applications to purchase a home or refinance a loan dropped 19 percent to 444.8 in the week ended June 26 from 548.2 the prior week. The group’s refinancing gauge declined 30 percent to the lowest in seven months, while the index of purchases fell 4.5 percent.

Unemployment, which touched a 26-year high in May, and rising borrowing costs have discouraged homeowners from refinancing, while rising foreclosures thwart builders’ efforts to clear a glut of unsold houses. It would take about 9.6 months to sell the nation’s 3.8 million unsold homes at the current sales pace, according to the National Association of Realtors.

“The worst is behind us but we’re a long ways off from a recovery in housing,” said Mark Vitner, a senior economist at Wachovia Corp. in Charlotte, North Carolina. “Inventories are still elevated. We’re not expecting any strength in housing until the second half of 2010.”

U.S. Mortgage Applications Fall 19%, Defying Government Efforts

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