Home-loan demand hits 13-year low, bankers group says
For sale and in foreclosure signs still abound, but applications for home purchases dropped off to a 13 year low after the federal tax credits expired April 30. (April 2010) Credit: AP
Home loan demand has dropped off to a 13-year low after federal tax credits for home purchases ended. At the same time Americans took advantage of near-record low mortgage rates to refinance existing home loans, according to reports Wednesday by the Mortgage Bankers Association.
Applications for home mortgages dropped off 27.1 percent, the lowest level since May 1997, the report said. A federal program gave up to $8,000 in tax credits for home buyers. The program ended April 30.
In the weeks since, applications for home purchase loans have fallen almost 20 percent despite favorable interest rates, the bankers group said in its Weekly Mortgage Applications Survey for the week that ended on May 14.
"The data continue to suggest that the tax credit pulled sales into April at the expense of the remainder of the spring buying season," according to a statement in the report by MBA vice president for research and economics Michael Fratantoni.
However, refinancing applications jumped to a nine-week high and accounted for about 68 percent of all applications last week, the report said.
