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More Housing Market Confusion: Mortgage Apps Up

Data Source: Mortgage Bankers Association hide caption

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In the past two days, we've seen optimism among home builders that the housing market is about to bounce back, but we've also seen a decrease in the construction of new houses. Today, another important housing market indicator was up: the Mortgage Bankers Association index of new mortgage applications increased by 5.6 percent in the week ending August 14th.

The index is still down over fifty percent from April high of 1250.6 — it's now at 527. But the real thing to pay attention to is the reason for the rise: affordability. According to the report, interest rates are at a five-week low. Analysts say that the low rate, combined with low housing prices and the stimulus' $8000 tax credit for first-time home buyers, is encouraging more folks to take out mortgages.