Last week, mortgage applications rose due to the interest in for home refinancing loans.? Although overall applications were up demand for home purchase loans was down.? The spring is the peak of buying season so the hit that home purchase loans sees may be a strong indication of where we are headed in the housing market.? The Mortgage Bankers Association said its index for mortgage applications rose 2.3% last week.

In the same set of data the MBA stated that average mortgage rates dropped to 4.69% which is just above the all time low that was set in March.? Last year at this time rates averaged 5.9%.? Overall, the four week average of mortgage applications was down 6.4%.? It seems very clear that refinancing is the only thing carrying mortgage applications in the current market; very few people are buying new homes.

As many of us have said in the past, this economy is not going to get better until people start buying new homes.? With many loans set to reset in the coming months, it will be very interesting to see if there are any glimmers of home in the near term.? I personally do not see the overall housing market getting better as there is very little new money coming into the arena. ? In all reality, there is much more money coming out as home values continue to drop and current home owners are refinancing at lower rates making their payments less.

On a side note, here is a very interesting chart on the S&P 500 as it relates to gold.? As many of you know, I am a firm believer that the commodities bull will extend for many more years and there is HUGE money to be made as inflation will hit hard.? If you want to invest in something besides real estate, now is the time to get into commodities.