US mortgage appplications hit 5 year high

US banks are seeing a dramatic increase of mortgage loan applications as we wrap up 2008, and are reported to being have to reassign scores of workers to handle the crush of would be borrowers.  The 48% increase in the third week of December has been attributed to falling interest rates and borrowers "are starting to say 'Wow, I can get this piece of property at this price, which is a fair amount lower than I could have gotten it a year ago'" says  Todd Chamberlain, head of the residential mortgage division in Alabama.  This has given some bankers optimism that it could be the turning point in a battered lending sector and weak housing market.

In Canada, although mortgage rates are coming down as lenders respond to the Bank of Canada latest rate cut, the full benefit of the reduction won't be passed on fully to home owners and buyers. The lower rates may not be sufficiently assuring to encourage consumers to buy a home if the economy is threatening their paycheques, but there may be a positive side. Jim Murphy, president and CEO of the Canadian Association of Accredited Mortgage Professionals, says there are some good deals out there."Yes, we're in tough times. Yes, according to the Bank of Canada we're in a recession. But in historical terms, mortgage rates have never been as low as they are currently," Murphy said.

Wether lower interest rates will help turn around Canada's housing market has yet to be seen, but if the US situation improves in 2009 many believe Canadian markets are likely to follow.

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