Last week the number of mortgage applications increased. A drop in borrowing cost revitalized home refinancing and purchases in the U.S. The Mortgage Bankers Association’s index increased 3.2 percent this past week, while purchases gained 3.9 percent and refinancing grew 3 percent.
Many economists projected a major housing recovery in 2010. While we’ve witnessed small victories in the housing market we have yet to seen any major improvements. “Economic growth in 2010 has been subdued and this trend will likely continue for most of 2011. Households remain cautions given the weak job market”, says Jay Brinkmann, Mortgage Bankers Association’s chief economist.
The MBA predicts that the unemployment rate will decrease from 9.6 percent (its current rate) to 8.7 percent in 2010. The economic trade group also estimates that new home sales will slowly rise to 20 percent in 2011 and then leap to 40 percent by the end of 2012.