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Mortgage Purchase Applications Fall -2.11% WoW (The Slow Recovery In One Chart)

This is a syndicated repost published with the permission of Confounded Interest. To view original, click here. Opinions herein are not those of the Wall Street Examiner or Lee Adler. Reposting does not imply endorsement. The information presented is for educational or entertainment purposes and is not individual investment advice.

The weekly mortgage applications survey results are out for last week and they show that applications fell -2.11% Week-over-week (WoW).

mbastats082416

Hey, it is August! Mortgage purchase applications often peaked in April or May and then begin the long slide down until the end of the calendar year.

The trend in mortgage purchase applications can be seen in the following chart.  Mortgage purchase applications began falling in 2008 and bottomed-out in 2011/2012. But they have begun to slowly rise again along with the employment-to-population ratio (blue line).

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But credit scores for lower credit score households  (sub-660) started falling in 2007 and have stayed fairly constant since 2010. In other words, the purchase application “recovery” is mostly due to a higher employment to population ratio rather than loosening of credit to the sub-660 households.

I am still a bit puzzled by the new home sales numbers from yesterday, particularly since they are growing rapidly while mortgage purchase applications are not. I know, I know. All cash buyers. But even so, that must be a lot of all cash buyers. Or foreign investors. Something does not appear to be adding up.

nhsmbap082416

The US Census Bureau’s numbers were driven by an alleged 18% surge in new home sales in the South. Yet, according to Redfin.com’s data for July, homes sales for July in the south’s biggest MSAs (population areas) declined. In other words, the Census Bureau’s numbers conflicts drastically with Redfin’s and the MBA’s mortgage purchase applications index.

Then there is the median sales price of new home sales. They are now considerably above the highest level of the housing bubble, even though mortgage purchase applications are only slowly recovering.

nhsmedmbap

Strange days, indeed.

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