| NEW YORK
NEW YORK Aug 11 U.S. home loan demand climbed
last week but record low mortgage rates failed to light a fire
in a market constrained by unemployment and tight lending
Mortgage purchase and refinancing applications rose by
less than 1 percent in the first week of August, even as
30-year loan rates fell to 4.57 percent, the lowest in 20 years
of record keeping by the Mortgage Bankers Association.
This contract rate, which excludes added lender fees and
points, was down from 4.60 percent the prior week and 5.38
percent a year ago, the industry group said on Wednesday.
"Consumers don't have a sense of urgency right now," said
Patrick Lashinsky, president and chief executive of real estate
brokerage ZipRealty in Emeryville, California
See related graphic: link.reuters.com/fuv34n
"They think that interest rates seem to be continuing to go
down, they don't expect home prices to go up, so instead of
moving into home buying they're saving money for a downpayment,
they're trying to improve their credit," he said.
The U.S. housing market is still adjusting to life without
up to $8,000 in tax credits, which ended on April 30 and fueled
spring sales at the expense of summer activity.
Many potential buyers are grappling with job loss or wage
cuts, while sellers face a large pool of unqualified borrowers
under more stringent lending guidelines, economists said.
The Federal Reserve on Tuesday took new steps to keep
interest rates low to stimulate the economy, which it said has
slowed in recent months. See more: [ID:nN09275781]
Refinancings accounted for about 78 percent of all mortgage
requests last week, continuing to far overshadow demand for
loans to purchase homes.
The seasonally adjusted market index, which includes
purchases and refinancings, climbed 0.6 percent last week,
according to the MBA. The refi index rose 0.6 percent while
purchase demand rose for the fourth straight week but by just
The average 15-year mortgage rate, meantime, also fell last
week, from 4.03 percent to 3.95 percent, the lowest contract
rate on record, the MBA said.
"Affordability is just way too attractive" for U.S. housing
to enter a double-dip, said Greg Miller, chief economist at
SunTrust Bank in Atlanta.
Many housing experts predict prices, which have already
fallen roughly 30 percent from peaks set four years ago, to
post a comparatively slim single-digit decline before
"I don't know that we're bringing too many people out of
rental housing, but folks who are willing to drop prices and
sell have an incentive to do so now when purchasing something
else can still be beneficial," he added.