It's always darkest right before the dawn.....................
U.S. MBA's Mortgage Applications Index Rose 8.1% Last Week
By Shobhana Chandra
Aug. 8 (Bloomberg) -- Mortgage applications in the U.S. rose last week by the most since January, as cheaper borrowing costs encouraged more Americans to seek loans for home purchases and refinancing.
The Mortgage Bankers Association's index of applications to buy a home or refinance a loan jumped 8.1 percent to 656.5 from 607.1 the prior week. The group's gauge of demand for credit for home purchases gained 7.4 percent, while a measure of refinancing increased 9.1 percent.
A resilient labor market and lower home prices may support sales and eventually help reduce the glut of unsold properties, economists said. A report last week showed Americans signed more contracts to buy previously owned homes in June, a sign the weakness in the housing market may not get much worse.
``We're at the bottom right now in housing,'' said Mark Vitner, senior economist at Wachovia Corp. in Charlotte, North Carolina. ``The biggest declines are over.''
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5 comments:
Calculated Risk believes their sample is flawed - as brokers going down, they're original sample is gaining market share instead.
Sippin,
Can you give me the link where he makes this argument? That said I'm more interested in the trend then the actual number.
thx
DB
http://calculatedrisk.blogspot.com/2007/08/broker-application-practices.html
http://calculatedrisk.blogspot.com/2007/08/mba-index-and-bottom-callers.html
http://calculatedrisk.blogspot.com/2007/08/mba-index-and-bottom-callers.html
A title co friend of mine has gone from 20-30 deals on her desk to 5 at the end of July. Their top mortgage broker lost over 25 deals with the failure of AHM at that time. Another friend at CFC says their pretty busy, but its the slack from failing lenders they're picking up.
This correlates with Calculated Risk.
I've found that most data lags. Ben B (Fed) recently cited YOY housing prices as "stable" but he was looking at the year from 10/2005 to 10/2006 - the "top of the ride" as far as I can see. We're riding this roller coaster down.
I also believe that BLS no longer properly measures the rate of inflation - artificially measuring lower by their basket of goods causing a misreading of recessions (your current blog)
A friend of mine at country wide claims that their goal is to double market share by the end of 09.
The big boys are the only ones doing jumbo loans because they have cash.
Obviously there will be less loans to do, but CW will be doing a lot of them.
Sippin,
Thank you. I'll check those links out. I do believe due to lag and inconsistent same home data makes any attempt to measure national housing prices in a meaninful timley manner very inadequate.
On your inflation front, I believe there is absolutely no inflation risk as noted by yesterday's headline and core inflation data. I also belive that the owner's equivilant rent will decrease and bring it down even more. I'm worried considerably more about short term credit and our banking system than I am about any inflation fears.
I do acknowledge deals disappearing off your friends desk due to this credit freeze we are experiencing, that's why I've been asking for the Fed to act, and act now. The effective funds rate is already near 4.54% close to where I've been asking it to go.
thank you for your thoughtful comments.
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