Mortgage Applications Highest in Three Years
"Mortgage applications increased 18% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 8.
The Market Composite Index, a measure of mortgage loan application volume, increased 18% on a seasonally adjusted basis from one week earlier to the highest level since May 2009. On an unadjusted basis, the Index increased over 30% compared with the previous week. The Refinance Index increased over 19% from the previous week to the highest index level since April 2009."
MP: More evidence that the real estate market is making consistent gains, and in a gradual recovery mode.
11 Comments:
Interesting. Who would have thought it would take more than just low interest rates to get people back into housing?
it's worth getting a little perspective there.
that% jump may look big, but look at the longer historical context:
http://www.calculatedriskblog.com/2012/06/mba-refinance-activity-increases-as.html
the 4 week avg of the mba mortgage purchase index is still down about 60% from the highs and over 30% from the late 90's.
"the 4 week avg of the mba mortgage purchase index is still down about 60% from the highs and over 30% from the late 90's."
I think a big factor may be that second mortgage (home equity) financing is down substantially form the bubble top.
that% jump may look big, but look at the longer historical context:
http://www.calculatedriskblog.com/2012/06/mba-refinance-activity-increases-as.html
the 4 week avg of the mba mortgage purchase index is still down about 60% from the highs and over 30% from the late 90's.
And there are still the problems of FHA 3% down mortgages being handed out and shadow inventories not being liquidated very quickly. Those are not the foundations of a recovering market.
Of course, we could see a major QE operation yet again so investors could be anticipating serious inflation some time in the next few years. In that case hedging would make a lot of sense.
JM,
I just ran into an acquaintance who is a mortgage broker. They have so many new regulations piled on top of them (between 2010 and 2011 it was more than one new reg per DAY), nobody is all that jazzed about lending. Nobody is sure they're doing it right.
Now, if Fan and Fred finds the smallest error, the bank is forced to buy back the mortgage. It doesn't have to be a material error and the bank can't just correct it.
It was a long conversation, but suffice to say that while the government seems desperate to re-inflate the housing bubble, it's imposed such Draconian regulation (which the industry is having trouble understanding and which - as is typical - the regulator won't clarify) that everyone is afraid to move.
methinks-
one cannot help but be reminded of the "push-me-pull-you" of dr doolittle fame.
they are desperately trying to pull in one direction and seem preposterously unaware that the "consumer protection regulations" they are passing pull in the other.
buddy-
refi activity is low and cash out refis all but gone to be sure. i have no idea how to quantify that.
you have any thoughts on how to do that?
"buddy-
refi activity is low and cash out refis all but gone to be sure. i have no idea how to quantify that.
you have any thoughts on how to do that?"
morgan, I do not and I visited the mortgage bankers website, but can't seem to find any ready info. I would guess that home equity loans are way down, despite very low LIBOR linked rates, because they are variable and not fixed. Less leverage for consumptive fixes.
Yet Bob Shiller's analysis would suggest that the intrinsic economic value of housing assets is nowhere near "bargain" levels. The free-fall may be abating, but there will be no rush to own homes for quite awhile. Besides, with family median net worth having dropped almost 40% in three years, the wherewithal is not there.
Mortgage brokers were largely blamed for the mortgage crisis because they originated loans on behalf of numerous banks and weren’t paid based on loan performance. Vancouver Home mortgage
mark-
it's difficult to see how that would be true. mortgage brokers do not lend money, they just interface between you and the bank. they were not the ones dropping standards, the banks were. a mortgage broker cannot create a loan that a bank does not approve.
and why did bank standards drop?
2 reasons:
1. the CRA forced them to lend to subprime as if they were prime and banks that refused were sued and forced to comply.
2. freddy and fannie cut their standards and were happy to buy trash loans and MBS's based on trash loans. why be concerned about loan quality if you know the GSE's are going to buy them 10 days after you originate anyhow?
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