LoanNetwork

Higher Demand for Mortgage Loans: a Potential Housing Recovery?

Increased demand for purchase money mortgage loans may offer hope for the US housing market, but critics cite ongoing foreclosures and homes worth less than mortgage loans against them as stumbling blocks to a full recovery.

Seasonally adjusted figures reported by the Mortgage Bankers Association (MBA) indicate that applications for mortgage loans for home purchases increased approximately .5% during the week ending March 5. The four week moving average of mortgage applications indicated an increase of .8%. This can be seen as a good sign for struggling US housing markets. Ongoing concerns for housing recovery are based on adverse factors including long term unemployment and homeowners who cannot sell or refinance their homes due to owing more on mortgage loans than their homes are worth. High numbers of foreclosures and short sales can also depress home prices.

Mortgage Rates Offer Affordability

With the pending expiration of the federal tax credit for homeowners, and changes in FHA guidelines, buyers may face additional challenges when buying homes, but mortgage rates remain relatively low. This is an important consideration, as lower rates offer lower monthly mortgage payments and more buying power.

Short on Cash? Check out FHA Home Loans and Local Programs

If you’re short on funds for a down payment and closing costs, there are programs that can help. FHA loans are available with 3.5% minimum down payments, and FHA guidelines allow borrowers to use cash gifts from friends, family and employers for funding their down payments. Community and state housing finance programs may offer down payment assistance; check with mortgage lenders and real estate pros to learn more about home purchase assistance programs in your area.