Home Mortgage Applications are up for the Beginning of the Year

By Korollos Shalaby

Applications for home mortgages in the United States rose for the third straight week, driven by increased demand for refinancing, according to data released on Wednesday by a trade group.

The Mortgage Bankers Association (MBA) said its seasonally adjusted index of mortgage application activity, which includes both refinancing loans to buy homes, increased by 7 percent in the week ending on 18 January.

The seasonally adjusted index of refinancing applications increased the MBA 7.7 percent, while the gauge of loan requests for home purchase, the principal measure of property purchases, gained 2.5 percent.

The refinance share of total activity regarding mortgages remained stable at 82 percent of applications. Mortgage rates 30-year fixed averaged 3.62 percent were up 1 basis point over the previous week.

The survey covers over 75 percent of residential mortgage applications U.S. retailers, according to the MBA. Although the government has taken steps to try to protect the most disadvantaged of the threat of eviction, the prospects, today, are bleak. A study by property consultant Alteba, this year and early next year said that another 160,000 families could lose their home.

Unemployment is, once again, the greatest threat to these households. If the situation does not improve, the delinquent can settle the debt in about two years.

And as explained Miguel Angel Bernal, professor at the Institute of Economic Studies (IEB), "during the years 2010 and 2011 there was a significant rise in unemployment which will now notice evictions." In 2009, the unemployment rate was 17.36%. In 2010 it passed the psychological barrier of 20% -20.1%  and in 2011 stood at 21.3 percent.

In the meantime, sales of new U.S. homes fell in December, while the median home price rose and the sector still appears to be the bright spot in the country's economic recovery, a report showed Friday.

The Commerce Department said sales fell 7.3% in December to an annual rate of 369,000 units, less than the 385.000 units estimated by analysts.

Government data on new home sales are subject to substantial revisions. In fact, the Commerce Department raised its estimate for sales to November by 22,000, to 398.000, the highest reading since April 2010.

The property sector has been a strong point in the economy over the past year and is expected to help offset the economic damage of taxation hikes this year.

The average price for a new home rose to $ 248.900 $ 245.600 in December from November, according to figures that are not adjusted according to seasonal fluctuations. The price hike is considered a sign of improved health in the housing market.

Economists believe that housing construction contributed to economic growth last year for the first time since 2005. Friday's report showed that in 2012, 367.000 new homes were sold, the most since 2009.

Still, that number is about a third of the record sales of 2005, before the collapse of the housing market contributed to the recession of 2007-2009.

Korollos Shalaby is a nationally acknowledged mortgage expert with over 6 years experience as a loss mitigation expert and mortgage finance consultant. He has owned several companies and has been at the forefront of all lending and banking practices since 2006.