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Rising mortgage apps

A "For Sale" sign hangs in front of a home in Naples, Fla., a city that a March 2006 survey declared the most overvalued housing market in the US.

TEXT OF STORY

SCOTT JAGOW: More people are signing on the dotted line for mortgages. Wait, I thought the housing market was cooling? Oh, there's a catch to this. Marketplace's Sam Eaton explains.


SAM EATON: Look a little closer at the latest mortgage numbers released this week by the Mortgage Bankers Association and there's a message behind the madness: People aren't opening mortgages on new homes, they're refinancing existing ones.

That means this sudden uptick of mortgage applications isn't likely to last says Celia Chen, director of housing economics at Economy.com.

CELIA CHEN: The increase I think in the refi index will be temporary as house price appreciation slows and as mortgage rates pick up a little bit more I think a lot of these folks who have jumped in to take advantage of the low rates will no longer be as interested in refinancing.

Especially since many are refinancing out of adjustable rates and into longer term fixed rate mortgages.

And it's not just opportunistic consumers who are taking advantage of the recent pause in interest rate hikes.

Chen says there's also been a rise in aggressive marketing from mortgage brokers trying to cash in while they can.

I'm Sam Eaton for Marketplace.

About the author

Sam Eaton is an independent radio and television journalist. His reporting on complex environmental issues from climate change to population growth has taken him all over the United States and the world.

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