Mortgages Drop in 2006

Reports issued this week show that the first half of 2006 showed a decline in mortgage originations, both in unit and monetary count. A drop in home value, as well as more mortgage options, still did not help numbers this year.

Housing values fell in 2006, making it a year of the buyer when it came to mortgages. Though refinance applications were up during the summer, due mostly in part to a lag in mortgage rates during summer months, many mortgage professionals looked to the power of home buying to boost a declining mortgage market. After reports were issued this week, those hopes can be seen to be in vain. Mortgage originations fell by almost 20% when compared to the last six months of 2005.

Originations in dollar terms fell by 16% compared to last year, while the loan count of originations fell by 18%. Across the board, 2006 has not been a good year for the housing industry; inflated home values of 2004 and 2005 are prohibiting many homeowners from refinancing their mortgage. Current numbers for the second half of 2006 are better, after the Fed declined to raise its rates, giving climbing mortgages rates a break during the later months of the summer.\r\n