A mortgage application
A mortgage application - 


Scott Jagow: There's even some positive news for the housing market this morning. Last week's mortgage applications hit their highest level since 2005. Jeremy Hobson has more.

Jeremy Hobson: A little context first: The 2.5 percent jump last week still puts applications well below their 2003 peak.

And, says MIT Professor William Wheaton, a rise in applications doesn't mean more people are buying homes.

William Wheaton: What it means probably is that a lot of the turmoil in financial mortgage markets is creating a need to restructure and refinance mortgages.

In fact, the survey says new purchases were up less than 2 percent, while refinancing rose more than 4 percent.

Wheaton says that has a lot to do with interest rates being reset on those pesky adjustable-rate mortgages.

Wheaton: So what we expect to see is not only a lot of foreclosures as the rate resets happen, but people trying to restructure their loan as well.

Wheaton expects the housing market conditions will get worse next year before they gets better.

In Washington, I'm Jeremy Hobson for Marketplace.

Follow Jeremy Hobson at @jeremyhobson