Are Higher Mortgage Rates Slowing Housing Recovery?

Source: Mortgage News Daily

Mortgage rates once again surged upwards. The Mortgage Bankers Association’s Loan Application survey this week said that demand for home loans in the first week of June fell 7.2% compared to the previous week, as the average rate for a 30-year mortgage shot up 32 basis points to 5.57%. This is only the second consecutive week that average rates have exceeded 5.00%, but already they are at their highest level since November.

Tax Credit Monetization Plan Announced

Last week, HUD Secretary Shaun Donovan announced that the Federal Housing Administration (FHA) will allow homebuyers to apply the Obama Administration’s new $8,000 first-time homebuyer tax credit toward the purchase costs of a FHA-insured home. Donovan said that the action will help stabilize the nation’s housing market by stimulating home sales across the country.

The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit of up to $8,000 for purchasing their first home. Families can only access this credit after filing their tax returns with the IRS.

New Help for Homeowners Web Site

The Obama Administration has unveiled a Web site to assist homeowners in determining whether they are eligible for help with their current mortgages. This comes, as loan servicers determine how to implement the President ’s foreclosure prevention plan.

The new help for American’s homeowners web site can be found at MakingHomeAffordable.gov.

The administration’s new Web site helps homeowners determine whether they might qualify for either a loan modification or refinancing. It also provides links to finding government-approved housing counselors and warns people to avoid foreclosure rescue scams.