Housing Intact? Mortgage Applications Dip

The number of Americans applying for a mortgage continued to trend lower last week, despite falling interest rates and the end of the government shutdown.

Applications for mortgages fell 0.6 percent week-over-week, while refis dropped by 1 percent, according to the latest report from the Mortgage Bankers Association.

In the last four weeks, mortgage applications are down 10 percent, and all-cash bids remain unusually elevated, at 33 percent of sales. The numbers indicate institutional investors are still very active in the housing market, even though some anecdotal reports suggest otherwise.

Interest rates on most mortgages continue to decline. Rates decreased from 4.46 percent to 4.39 percent for conforming loans, and fell from 4.51 percent to 4.43 percent for so-called “jumbo” loans.

Delinquencies, meanwhile, spiked in September, rising 4.23 percent. It’s possible some federal workers might have skipped their mortgage payments to save for the anticipated government shutdown. Those delinquency numbers could, in fact, reverse themselves as furloughed workers receive backpay.

The housing picture still looks a lot better than it did a year ago: delinquencies are more than 12 percent lower than the same period in 2012, while foreclosures are down a whopping 32 percent year-over-year.

Despite some bumps in the road, the U.S. is still enjoying a strong housing recovery as we approach 2014.