Applications for mortgages–both for new homes and refinancing–at big U.S. banks dipped 3.9% last week compared with the previous week. The applications were down 1.6% year-over-year.

ARMS made up only 24.5% of last week’s applications, their smallest percentage in three years. The average interest rate for ARMs slipped from 5.88% to 5.87%.

Applications for loans to buy a home rose 1.3% over the last week, but are down roughly 14.6% from last year. Applications for loans to refinance existing loans sank 9.6% in the past week, but are up about 18% from the previous year.

Technorati Tags: real estate, real estate market, mortgages, home loans, ARMs, refinance, refinancing

I read recently that this year there’s 4 million homes on the market in the United States. According to historical data, that’s a million more than there was this time last year. That’s an increase of 33%.

“Until now sellers didn’t want to cut their prices. They were much more willing to provide an incentive - refinish the deck, seal the driveway, help with the financing, anything but cut the price,” says Mark Zandi, chief economist of Moody’s Economy.com. Incentives are nice, but let’s face it: the last thing sellers want to do is slash the price of the property. They make out better by offering buyers incentives like these, and also, many homeowners are very hesitant to accept the fact that they’re home isn’t worth as much as they originally thought. But now they’re finally waking up to the truth - that smart buyers are waiting for an irresistable deal - and that cutting the price of the property is the best way to get someone to buy a house, a condo, or anything, for that matter.

Even the mortgage companies are catching on. Chances are if you buy a new home, your mortgage lender will offer you some incentives (but be careful - because of the complexity of the mortgage process, these incentives tend to be less transparent).

Brokers are making out well, too. Because of the glut of homes, real estate brokers are being catered to by the home building industry, which means that your broker may be eyeing some incentives if he unloads a house on you - and he’s not required by law to tell you that. Be clear with your broker; ask him/her up front if they’re receiving any incentives for selling the property. If you ask, they’re obligated to tell you. Otherwise, your broker might be less than straight with you in this market.

Technorati Tags: Chicago real estate, buyer’s market, Chicago condos, Chicago brokers

Tired of seeing charts like this one?  You may see something like the reverse soon (imagine the graphic upside down).  Although the Fed stopped raising interest rates last quarter, home sales continue to slow, but for how long?  History teaches that it may not be too long before home sales begin to rise again - as long as the rest of the economy takes a little turn as well.

The consumer confidence index, or how people who spend money in this country feel about the economy, “brightened” more than expected in September, causing realtor’s hearts to skip a beat.  This may be an overstatement, given that consumer confidence is only loosely related to the housing market (and condo sales!).  Most likely the confidence index was up because of declining gas prices and the leveling off of interest rate increases.  But will Joe Consumer shovel out the dough for a new condo in Chicago because he believes the economy to be somewhat “better”?  We’ll have to see.  Check for an update next month.