According to data released by the Mortgage Bankers Association for the week ending November 15th, it appears that the US home loan applications have fallen for three weeks in a row. The drop is estimated at 2.3 percent after adjustment for an ensuing holiday and includes both refinancing as well as loans for purchase of new homes. The total decline over the three week period is estimated at 6.7 percent. These declines have come after several weeks of gains and have raised concerns about the future sales.
Central Bank scaling back
It appears that the economic uncertainty may be one of the reasons for this decline. However, based on recent reports, it appears to be related to the speculations around when the central bank would decide to start reducing its ongoing purchase of treasuries and mortgage backed securities. As the economic and job related data have shown some strength in recent months, sometimes even overwhelmingly exceeding expectations, the current thinking is that the scaling down of the asset purchase program by the central bank may happen much sooner than sometime next year as was thought earlier.
Home Buyers left in a dilemma
If that expectation turns into reality, then, the housing market may witness a weakening demand which in turn could lead to reversal of the gains that were made in the recent past. For those of us looking to purchase a home, the best option for now would be to wait and watch where the economy heads before taking any decision.
Source: http://finance.yahoo.com/news/u-mortgage-applications-fall-latest-120000358.html