The credit crisis strangling the U.S. economy made its presence known again in numbers released Wednesday: The number of mortgage applications nationwide plunged 23 percent for the week that ended Sept. 26., according to data from the Mortgage Bankers Association (MBA). The seasonally adjusted index of mortgage application activity was measured at 455.4 down from 591.4 recorded in the week before.
The housing bubble has long since burst, and the nation's housing market has been mired in a mess ever since. Other weekly housing market indices tracked by the MBA also reflected significant declines. The refinance index fell 35 percent compared to the prior week, dropping to 1,333.9. The seasonally adjusted purchase index declined compared to the previous week, sinking 11 percent to 304.8. "During the first eight months of this year, new home sales were down 36.6 percent from the same period last year," according to the MBA.
Further, the MBA reported that real residential investment fell 13.3 percent in the second quarter of this year, marking the 10th consecutive quarter of decline and the ninth straight quarter of a double-digit drop. "From its peak, real investment in residential structures has dropped about 40 percent.
The MBA is far from the only organization to release facts and figures showing the depth and breadth of the trouble in the housing market; housing rescue efforts declined in August, according to Hope Now.
Hope Now is an alliance of mortgage servicers, counselors and investors who have teamed up to help homeowners facing foreclosure. It's a private partnership organized by the federal government. The alliance helped fewer people with their mortgages in August than it did in July, according to CNN Money.
Hope Now helped 189,000 homeowners avoid foreclosure in August, a 1.7 percent decline from the number it helped in July. "Hope Now said that nearly 79,000 at-risk mortgage borrowers had the terms of their loans permanently modified in August to make them more affordable, with lower interest rates, reduced principal or both," according to CNN Money.
Still, Hope Now has helped 2.3 million homeowners stave off foreclosure since July 2007, according to data they released today.
But Hope Now, in addition to offering hope, is also looking for hope from other sources. "Hope Now is absolutely successful in that it is saving people from going into final foreclosure, and that won't change," Faith Schwartz, executive director of Hope Now said. "But any further direction that helps homeowners offered by the government would be helpful."
Despite the efforts of Hope Now, foreclosures are still ravaging the U.S. housing market. And some areas are being hit harder than others. A new report today from PropertyShark.com, an online real estate data company, showed that in Seattle—an area that had been largely untouched by the housing crisis in comparison to the rest of the country—foreclosures doubled in the third quarter compared to one year ago.
Foreclosures in Los Angeles tripled in the same time period, according to PropertyShark.
Finally, according to a report issued last week by the National Association of Realtors, sales of previously owned homes fell 2.2 percent in August compared to July, and were 32 percent below their historic high, reached in September 2005.
With the economic situation continuing to worsen, Americans—and people worldwide—will be tuning in to see whether the House passes the rescue bill that the Senate passed yesterday.
