Photo of a loan refinancing building.
Home loan refinance applications are declining. CC by TheTruthAbout.../Flickr

There haven’t been many victories to speak of in the real estate market. There are a lot of people waiting for it to recover. Banks, sellers, buyers and definitely real estate agents. All is not lost, though. There are some signs of activity. There was an increase in the number of mortgage applications for home purchases. Not only that, but applications for loan modification dropped a little bit. However, applications to modify existing loans into low cost loans, or at least lower cost loans, are still the bulk of mortgage activity, which is significantly low.

New mortgage applications increase

The number of mortgage applications for the purchase of a new home has increased. Mortgage applications are tracked by the Mortgage Bankers Association, and they have noted a 6.3 increase in applications for a home purchase, which is the largest level since May, according to Reuters. However, it isn’t exactly great news. The numbers of applications that loan lenders received are at record low levels. Since May 2009, mortgage loan application rates have fallen by 40 percent.

Modifications are the subject of most applications

The vast majority of mortgage applications are still for mortgage modification. About 82 percent of all mortgage applications are for modifications, though the number of them dipped 3.1 percent since May. The rate for a fixed, 30-year loan is 4.5 percent. The MBA started calculating these statistics in 1990, and the current rates are nearly the lowest they have ever been. This bodes well for people looking to refinance. However, because finance loans are so much harder to access, it is difficult for many to reap the benefits.

Not very stimulated

The stimulus programs have not had the effects that people were hoping for. As the tax credit only managed to temporarily prop up home sales, and the federal refinance program barely works, it seems that the recovery to housing must come from below. People will only buy homes if they feel stable enough to buy.

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