Housing Woes Persist: New Home Sales, Mortgage Apps Down

MortgagesThe housing market sluggishness prevails as new home sales for February slipped 2.2 percent from the previous month, and a national index that measures loan applications decreased 4.2 percent last week.
The U.S. Commerce Department reported today that sales of new single-family houses in February were at a seasonally adjusted annual rate of 308,000, below the upwardly revised January rate of 315,000 and 13.0 percent below the February 2009 estimate of 354,000.
The new home sales figure missed expectations of a slight increase, especially after January’s sharp decline. And it follows yesterday’s report of a decrease in existing home sales for the third straight month.
The housing market sluggishness has not been energized by the extension and expansion of the homebuyer tax credit program late last year. The tax incentives for both first-time homebuyers and current homeowners looking for a replacement home are now set to expire April 30. The credits are as high as $8,000 for first-time homebuyers.
The median sales price of new houses sold in February 2010 was $220,500; while the average sales price was $282,600, Commerce said. By the end of last month, there were about 236,000 new houses for sale on a seasonally adjusted estimate, representing a supply of 9.2 months at the current sales rate.
In other housing market news today, the refinance share of mortgage activity slumped to 65.0 percent of total applications last week from 67.3 percent the previous week – the lowest refinance share observed since late October 2009, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey.
Overall, the four week moving average for the seasonally adjusted index covering purchases and refinances is up 1.9 percent. 
The average contract’s interest rate for 30-year fixed-rate mortgages increased to 5.01 percent from 4.91 percent, with points decreasing to 0.76 from 1.30 for 80 percent loan-to-value (LTV) ratio loans, MBA said. The effective rate was essentially unchanged from last week due to the significant decrease in points.

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