Mortgage applications are surging.. now that rates are at a three year low of 5.5 percent. In tonight's Economy Rockford report... A local mortgage expert says this is certainly good news.. but more needs to be done to end the housing slump.

"We have made it a little to difficult for people to get mortgages.. where before it was far to easy for some people.. we'll come back to the middle people buying houses they can afford and moving up as they get the opportunity to do that."

But until we get to that point... Ron Balsam says the recent plunge in mortgage rates is a good start to reviving the local housing market.

"the percentage of refinancing applications has increased dramatically.. we're running from 25 percent to 75 percent refinance since the rates dropped."

The drop will mainly benefit buyers with good credit. But Balsam also sees this as a good opportunity for those.. in over their head.. to potentially turn their fortunes around.

"Make it affordable to buy houses. Rockford is one of the best places the median income supports the price of the home.. the ability of people to refi and pay off larger debt allows people to buy bigger mortgages."

But Balsam says more needs to be done before we'll start to see a complete turnaround.

"get rid of the large inventory of unsold homes. Typically we run 3 to 4 months of inventory on the market place.. locally its 10 to 11 months of inventory. We've got to get that sold so the market gets back to an equilibrium."

Balsam says he thinks the government is doing a good job correcting the problem of giving loans to unqualified applicants.

He adds.. that of the 72-hundred mortgages Alpine Mortgage has.. less than 15 of them are in foreclosure. And if you're looking for some specific economic information.. head to wifr-dot-com and click on the Rockford economy icon to submit a question.