The Mortgage Bankers Association said applications for home loans dropped last week to a nearly nine-year low. The association said the uncertainty over the federal housing tax credit, which last week was extended into April, curtailed new mortgage applications. Michael Larson, a housing analyst at Weiss Research in Jupiter, said now that Congress has extended and expanded the credit, demand should pick back up. [Miami Herald]

Broward County saw a 56 percent increase in existing home sales in
July, according to the Florida Association of Realtors, while Palm
Beach County saw a 32 percent increase. That contributes to a national
average increase of 7.2 percent, according to figures released last
week by the National Association of Realtors. A full rebound isn’t
happening, but rather, there is continued gradual improvement, said
Mike Larson, a housing analyst with Weiss Research in Jupiter. [more]

Almost 2 million U.S. homes entered foreclosure in the first half of the year. Mike Larson, housing analyst with Weiss Research, and Jack McCabe of McCabe Research and Consulting spoke on CNBC about the ways in which rising unemployment and falling home prices are contributing to foreclosure numbers. McCabe said he sees no evidence that government mortgage modification programs are having a significant impact, and Larson said that’s partly because lenders are unwilling to cut the principal amounts that borrowers owe. Many banks are waiting to see whether any other government initiatives are forthcoming before they clear out foreclosed inventory, McCabe said. [more]

As investors begin to show signs of nervousness about backing
government debt, historically low mortgage rates could feel the impact,
further curbing South Florida’s shaky low-end market pickup. “Essentially, we’re seeing more and more aversion to taking on longer
term mortgage risk,” said Michael Larson, an interest rate and real
estate analyst with Jupiter-based Weiss Research. Larson predicts that rates will continue to creep past 5.5 percent
within a few months. The higher rates equate to more of a U-shaped
housing recovery, Larson said. “I don’t think this will be like 1982
when we had double-digit rates,” he said. “But the rates will get
higher, and that will be a problem for a housing market that is still
weak.” [more]