According to an article on Bloomberg.com Mortgage Bankers Association applications to buy a new home or refinance and existing loan rose 112% last week. The rise comes on the news the Federal Reserve is going to buy Mortgage Back Securities. This news sent rates tumbling last week and caused applications to rise.
On Nov. 25 the Federal Reserve pledged to purchase up to $500 billion in so-called agency debt as well as up to $100 billion in direct debt of Fannie Mae and Freddie Mac, the world’s two largest mortgage buyers, and Federal Home Loan Banks.
“This action is being taken to reduce the cost and increase the availability of credit for the purchase of houses, which in turn should support housing markets and foster improved conditions in financial markets more generally,” the Fed said in a statement.
Mortgage Rates Fall
This announcement sent the 30 – year mortgage rate falling to a 3 year low of 5.47% down from 5.99% the week prior.
Across the board home prices have fallen by about a fifth from their peaks in mid-2006, according to the S&P/Case- Shiller home price index. Page, Arizona has not seen price drops in that arena. Page home prices for single family homes have remained steady even though there are less homes selling.