While no one is ready to call the bottom of the worst housing collapse in decades, there were glimmers this week that the severity could be waning.
Reports Tuesday showed the glut of newly built homes on the market fell to a five month low last month, while the decline in home prices is starting to ease, and in some cities values are even starting to rise. What’s more, existing home sales rose slightly from June to July, according to data Monday.
The Senate and Congress have debated over a housing rescue bill, designed to help businesses and homeowners who have been affected by the housing crisis, for months now. With each set of lawmakers passing their own versions and amendments to the bill, and the president’s threat of veto hanging overhead, the purported rescue has gone nowhere.
Wachovia, on the other hand, issued a press release this week outlining the bank’s current initiatives designed to help keep their customers out of foreclosure and in their homes.
The Senate unanimously passed an amendment regarding Adjustable Rate Mortgages (ARMs) to the ongoing housing rescue bill last week. Senator Christopher S. Bond’s (R-Mo.) amendment requires lenders and brokers to provide clearer information to consumers regarding ARMs with “teaser” rates. Senator Bond explained ARMs with teaser rates “played a large role in our current subprime mortgage crisis.”
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).
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.
