Mortgage applications down, home-equity credit delinquencies up
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Surveys released today showed that fewer Americans applied for mortgages last week and more were missing payments on their home equity lines of credit.
The Mortgage Bankers Assn. said applications for new home loans fell 8.2% for the week ending last Friday, with a slight increase in interest rates for 30-year fixed mortgages reining in the breakneck refinance market. The refinance share of mortgage activity dropped from 82.9% to 79.8% of total applications, according to the MBA report this morning.
From the report:
The average contract interest rate for 30-year fixed-rate mortgages increased to 5.07% from 5.03% percent, with points decreasing to 1.16 from 1.24 (including the origination fee) for 80% loan-to-value (LTV) ratio loans. The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.67% from 4.79% percent, with points decreasing to 1.16 from 1.26 (including the origination fee) for 80% LTV loans. The average contract interest rate for one-year ARMs decreased to 5.90% from 6.15%, with points decreasing to 0.31 from 0.44 (including the origination fee) for 80% LTV loans.
Also this morning, the American Bankers Assn. said record numbers of borrowers had missed payments on home equity lines of credit during the third quarter.
The trade group’s latest report on late payments for consumer loans said delinquencies on car loans that banks made indirectly through auto dealers also were at the highest levels it had ever recorded.
By contrast, consumers were missing fewer payments on credit cards, the ABA said. A quote from the trade group’s economist James Chesen:
While some people are relying on credit cards to meet daily expenses like food and gas, many are being careful not to add new debt.
-- E. Scott Reckard
