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Wednesday, June 15, 2005

Housing: Record Purchase Activity and More

by Calculated Risk on 6/15/2005 03:22:00 PM

The Mortgage Bankers Association (MBA) released their weekly report today showing record purchase activity.

The seasonally-adjusted Purchase Index increased by 10.4 percent to 529.3, a record high, from 479.3 the previous week whereas the seasonally-adjusted Refinance Index increased by 25.6 percent to 2967.4 from 2362.1 one week earlier.

"This week there was a combination of record-setting purchase activity as well as a substantial pickup in refinance applications, with the refinance index at its highest level since April 2004," said Michael Fratantoni, senior director of single-family research and economics.
The use of ARMs decreased:
The adjustable-rate mortgage (ARM) share of activity decreased to 30.9 percent of total applications from 31.7 percent the previous week.
Also, the National Association of Home Builders and Wells Fargo reported that home builders were optimistic:
"single-family home builders are more confident this June than they’ve been all year".

The most optimistic builders are in the West, where an HMI reading of 88 far outpaces that of builders in all other regions. Moreover, the 88 reading reflected a solid four-point gain from last month. Southern builders were also a bit more confident this time around, posting a one-point gain in their regional confidence gauge to 76 in June. Builders in the Northeast maintained a healthy, 70-point reading on the confidence scale, while builders in the Midwest registered a two-point confidence boost, to 52.
Meanwhile, DataQuick reported:
The sales pace of homes in Southern California eased back a notch in May as prices continued to climb to record levels, the result of steady demand and affordable mortgage financing, a real estate information service reported.
Although appreciation has slowed in some of the hot markets like San Diego, overall the housing market is still HOT!