First time homebuyer's data fell 16.6 percent
including consumer who wants to refinance. The Mortgage Bankers
Association's seasonally adjusted index of mortgage applications
fell to lowest levels since 2000.
New homebuyers stayed away from purchasing new homes
as tight credit and higher qualifications including higher down
payments are required to buy a home. Job insecurity was
another leading factor as it may rise to five year high.
Many people are staying away from buying a home as
prices may still decline or they can't get a mortgage. The Mortgage
Bankers Association's purchase applications index fell 10.9 percent
to 279.3 in the week ended October 17, while its refinancing
applications were down 23.5 percent to 1,158.8
A recession appears on the way as rising unemployment
and declining spending are still persisting. Due to access of houses
on the market residential properties will decline in upcoming 2009
as well as we will se rise in foreclosures.
Stocks on the other hand continue to search bottom as
investors were getting news about third quarter results in which
most cases were grim. Investors are concerned about duration of
downturn in earnings and if it will persist in next quarter.
Credit markets start to show signs of improvement as
bank to bank lending rates fell sharply, indicating that credit is
becoming easier to obtain. The London Interbank Offered Rate, or
Libor, on three-month loans fell to 3.54 percent from 3.83
percent.
News on Wall Street were mixed today as AT&T Inc.
said its third-quarter earnings rose 5.5 percent while Travelers
rose $1.27, or 3.5 percent, to $37.60, Wachovia fell 10 cents, or
1.6 percent, to $5.99. Merck fell 53 cents, or 1.8 percent, to
$29.44
A fear of global recession may be around the corner.
Treasury Secretary Henry Paulson said that there will be difficult
months ahead.
World leader will gather in Washington on Nov.15 to
discuss financial meltdown as many U.S companies are feeling the
squeeze. Merck & Co. said it will slash 7,200 jobs while Yahoo
is slashing 1,500 jobs.
A week after Paulson announced $250 billion rescue
package to help U.S. banks a new plan of $540 billion run JPMorgan
Chase & Co. to purchase from mutual funds certificates of
deposit, bank notes and commercial paper. New program called the
Money Market Investor Funding Facility, is designed to revive the
market for commercial paper, short-term loans that are critical for
keeping businesses running.
The Fed has already announced that starting next
Monday it will begin making direct purchases of commercial
paper.
Democrats are pushing to assemble another economic
plan that could total $150 billion or more. They White house has to
endorse the idea but President Bush is willing to consider a
stimulus measure.
Earnings season will be rough for investors to
brace. Many analysts predict recession will last for a few years as
slowdown in economic growth, credit markets and housing will follow
economy.
Equal Housing Opportunity (c) Copyright 2008 RateTake.com