Applications for mortgages plummet 53%

REAL ESTATE WATCH

January 11, 2004|By Los Angeles Daily News

Mortgage applications plunged an annualized 53 percent during the last week of last year compared with the same week the previous year, reflecting the deceleration of the refinance boom, an industry tracker said Wednesday.

The Mortgage Bankers Association said its index of loans for the week that ended Jan. 2 increased 23.5 percent from the prior week.

John Karevoll, an analyst at DataQuick Information Systems, a supplier of real estate market information, said not too much should be made of the sharp decline in applications.

"I think we're going to have to wait until we're a bit further into the year before we can read too much into those numbers. Refinance activity has dropped back, but it broke all records by a wide margin," he said.

Experts think housing sales will remain healthy.

"The refinance boom is over," said Douglas G. Duncan, the association's chief economist and senior vice president of research and business development.

Refinancing has set records in the past three years. Last year, it accounted for $2.2 trillion of $3.3 trillion in loans.

This year, refinancings are likely to total about $500 billion out of total mortgage production of $1.6 trillion, Duncan said.

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