Rising home sales hopeful sign, Schenk tells Reuters

MADISON, Wis. (12/28/09)--Rising home sales are a hopeful sign, but not a clear signal that the U.S. housing market is in full recovery mode, a Credit Union National Association (CUNA) economist told Reuters Wednesday.

For the week ending Dec. 18, U.S. mortgage loan application volume declined 10.7% on a seasonally adjusted basis from one week earlier, according to the Weekly Mortgage Applications Survey released Wednesday by the Mortgage Bankers Association (MBA).

On an unadjusted basis, the index decreased 10.9% compared with the previous week. The Refinance Index declined 10.1% from the previous week and the seasonally adjusted Purchase Index dropped 11.6% from one week earlier. The unadjusted Purchase Index decreased 13.4% compared with the previous week and was 32.7% lower than the same week one year ago.

"Affordability is high, prices are low and going lower, rates are low, there are incentives in play and that all helps," said Mike Schenk, CUNA senior economist, told Reuters.

The slack labor market, high consumer debt levels and home prices dropping in many areas of the country "convince us that this will be a longer-term recovery than most people might be expecting," he added.

Along with the 10% of the work force that is unemployed, 9.5 million people are underemployed and many others have dropped out of the labor force altogether, Schenk told the news service.

Although the sales increase presents hope, "I don't think this is a signal that we have now begun to experience fundamental changes that will cause the housing market to resume its upward trajectory," Schenk concluded.

To read the article, use the MBA report link below.

print this story email this story
Resource Links
Reuters article
CUNA Research & Statistics
The MBA report
CUs in the Media


More Market

Copyright © 2012 Credit Union National Association