NEW YORK, Nov 18 (Reuters) – U.S. mortgage applications fell last week, with demand for home purchase loans dropping to a 12-year low even as interest rates on 30-year loans fell to their lowest level in six months, data from an industry group showed on Wednesday.
Home purchase loan demand fell for a sixth straight week, a trend that does not bode well for the U.S. housing market, which has been showing signs of stabilization after a three-year slump.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications USMGM=ECI, which includes both purchase and refinance loans, decreased 2.5 percent to 611.7 for the week ended Nov. 13.
The hard-hit housing market, a primary driver of the worst U.S. recession since the 1930s, remains highly vulnerable and many are hopeful that the federal government’s intervention will prevent any setbacks.
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The prospective homebuyers, who are looking to cobble together funds to buy an attractive property, now have every reason to cheer.
To give a fillip to affordable housing across the country, the government is likely to clear a proposal to provide one per cent interest subsidy on housing loans up to Rs 10 lakh for houses not costing more than Rs 20 lakh.