Mortgage interest rates are declining following the Fed’s decision not to taper in September. But most of the housing data continue to reflect the earlier hike in rates. Housing market confidence has taken a knock. And while home sales rose in August, they probably declined in September. The rise in mortgage applications for home purchase last month was more encouraging, but the Federal shutdown could dampen lending volumes this month. After all, the FHA is operating on a skeleton staff and the IRS is not processing the tax return transcripts which some lenders require for income verification. All of this adds to our belief that the housing recovery is set to slow from here.
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