The Mortgage Bankers Association [MBA] reported that mortgage applications, which include loans for home purchases and refinancings, increased 11.4% last week over the prior week, and now stand 22.2% higher than the same week a year ago and at their highest since October 2005. Applications for loans to purchase a new home rose 8.7% over the prior week, down 3% over the same week last year but at the highest level since January. Refi applications are up 60% from a year ago, and accounted for 53.6% of all applications. Average mortgage interest rates have fallen about 0.8 percentage points since the early summer. The average rate for an adjustable rate mortgage is now 5.79%, the lowest since March. Doug Duncan, chief economist of the MBA said of the housing slow-down "The end is in sight." Meanwhile, the delinquency rate on family residential mortgages rose to 4.67% in Q3, up 0.28 percentage points from Q2, implying that almost 1 in 20 mortgage holders is at least 30 days behind on payments.
• Sources: Business Week, Bloomberg, Wall Street Journal, MarketWatch
• Related commentary: Housing Bubble and Real Estate Market Tracker, Mortgage Lenders and the Deflating Housing Bubble, Toll Brothers' Upbeat Guidance Lacks Support - Credit Suisse.
• Potentially impacted stocks and ETFs: Toll Brothers Inc. (NYSE:TOL), Beazer Homes USA Inc. (NYSE:BZH), Lennar Corporation (NYSE:LEN), Centex Corp (CTX), KB Home (NYSE:KBH). ETFs: iShares Dow Jones US Home Construction (NYSEARCA:ITB), SPDR Homebuilders (NYSEARCA:XHB).
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