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May 7th, 2008 (Modified on March 6th, 2009)

Positive Signs in the Housing Market

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Mortgage applications rose for the first time in three weeks, as interest rates dropped for the week ending May 2. Both purchase and refinance applications were up; experts are hoping this trend will continue in this critical spring home-buying season. According to the Mortgage Bankers Association, mortgage applications rose 15.6%, as purchase applications shot up 12.1% and refinance applications rose 19.3%.

U.S. Treasury Secretary Henry Paulson believes markets are beginning to emerge from the credit crunch. “I do believe that the worst is likely to be behind us,” said Paulson in one of the most positive statements to come out of the Bush administration regarding the economy in some time. Paulson believes Congress will likely soon pass two initiatives vital to stimulating the housing market – an improved regulation of Fannie Mae and Freddie Mac, two government-sponsored mortgage companies, and the overhaul of the Federal Housing Authority (FHA).

The House is due to begin debating the latest housing rescue bill today. The government has come under fire for their momentous bailout of Wall Street giant Bear Stearns, and their lack of aid for the American homeowner. The bill offers tax credits and a cash infusion to buy up abandoned homes and help an estimated half million homeowners facing foreclosures, as well as the FHA guaranteeing $300 billion in home loans. Critics fault the plan for putting too much government money at risk.

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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