Spring Thaw?

Well, not literally, at least not in Chicago yet. However, amidst all the doom and gloom surrounding the housing market, we see a ray of warmth. Mortgage applications for purchases rose 12% last week.

What does this mean for the long term outlook? Well, maybe nothing--it could just be a coincidental spike. On the other hand, it could be a sign that buyers--who recently have been too scared off by media reports to even consider buying a home--are finally starting to get off the fence. As Realty Time columnist Kenneth R Harvey states,

"You can't simply ignore all those new mortgage applications. They're real. Something's going on -- and it could be that the word is finally getting out to consumers that home loan rates at an average 5.6 percent for a 30-year fixed-rate mortgage -- are close to 40-year lows.

Money for home purchases right now is cheap, no question. And we all know housing prices are lower this year than they were last -- sometimes by 10 and 15 percent or more, depending on local market conditions."

It certainly bears watching. I have said for a while now that if mortgage rates remain low, buyers will begin to come out of hiding. Let's hope this is a sign that is finally happening.