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Mortgage Applications Sink To 13 Year Low

Tyler Durden's picture


The attempt to reflate housing seems to be officially dead. The Mortgage Brokers' Association reported that demand for loans to purchase
U.S. homes sunk to a 13-year low last week, and refinancing
demand also slid despite near record-low mortgage rates. As Reuters noted,
"requests for loans to buy homes dropped 3.1
percent in the
week ended July 9, after adjusting for the Independence Day
holiday, to the lowest level since December 1996, the industry
group said....
Rock-bottom borrowing costs are helping borrowers
pristine credit to buy and those who still have equity in their
homes to refinance.
" Also, from the MBA release, "the average contract interest
rate for 30-year fixed-rate
mortgages increased to 4.69 percent from 4.68 percent, with points
increasing to 0.96 from 0.86 (including the origination fee)
for 80 percent loan-to-value (LTV) ratio loans.  The effective
rate increased from last week." If even at sub-5% rates potential homeowners are not interested, it will take a whole lot of Intel CPU purchases to reverse the double dip in the economy as consumers refuse to purchase that primary bank balance sheet "asset."

Full release:

The Mortgage Bankers
Association (MBA) today released its Weekly Mortgage Applications Survey
for the week ending July
9, 2010.  The Market Composite Index, a measure of mortgage loan
application volume, decreased 2.9 percent on a seasonally
adjusted basis from one week earlier. This week’s results include
an adjustment to account for the Independence Day holiday. 
On an unadjusted basis, the Index decreased 12.6 percent compared
with the previous week.

The Refinance Index decreased 2.9 percent from the previous
week and the seasonally adjusted Purchase Index decreased 3.1
percent from one week earlier. This was the lowest Purchase
Index observed in the survey since December 1996.  The unadjusted
Purchase Index decreased 12.7 percent compared with the
previous week and was 43.0 percent lower than Independence Day week
one year ago.
The four week moving average for the
seasonally adjusted Market Index is up 1.5 percent.  The four week
moving average is
down 2.4 percent for the seasonally adjusted Purchase Index,
while this average is up 2.6 percent for the Refinance Index.

The refinance share of mortgage activity remained constant at
78.7 percent of total applications from the previous week. The
adjustable-rate mortgage (ARM) share of activity increased to
5.5 percent from 5.4 percent of total applications from the
previous week.

The average contract interest rate for 30-year fixed-rate
mortgages increased to 4.69 percent from 4.68 percent, with points
increasing to 0.96 from 0.86 (including the origination fee)
for 80 percent loan-to-value (LTV) ratio loans.  The effective
rate increased from last week.

The average contract interest rate for 15-year fixed-rate
mortgages increased to 4.12 percent from 4.11 percent, with points
increasing to 1.04 from 0.93 (including the origination fee)
for 80 percent LTV loans. The effective rate increased from last

The average contract interest rate for one-year ARMs remained
unchanged at 7.20 percent, with points decreasing to 0.22 from
0.24 (including the origination fee) for 80 percent LTV loans.



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Wed, 07/14/2010 - 08:15 | 467791 jkruffin
jkruffin's picture

Not to mention Complete Euro Collapse in the Making

"Wealthy Europeans in the know have been reducing their holdings of Euros and have moved their money out of Euro zone banks to safe banks in Switzerland. In effect, these are signs of a run on the Euro zone banking system taking place. This movement of capital will intensify and other Euro banks zone deposit holders will be rushing to do the same, this outcome is inevitable given the dire state of the banking system With such an interconnected and leveraged system, no bank in the region can be considered safe. The meltdown will intensify swiftly and without warning as capital in the system reaches critical levels and a number a of institutions experience intense withdrawals from deposit accounts. Since the systemic issues were not resolved and addressed sooner, there appears to be no other possible outcome than the one just described. These are extremely dangerous and volatile times and the situation will soon reach a critical stage and ultimately the banking system will collapse. As a result we would expect to see the EUR/CHF rate to move to 1.10 in short order.

They can play games with the capital requirement rules, but depositors and creditors should know that these institutions are not safe, and current attempts to water down regulations proves that. Many of these banks are insolvent right now. The toxic assets with inflated marks are being permitted to be kept completely hidden by the ECB. Depositors are already fleeing and if anything, this insistence to water down capital requirements should make them head for Swiss or other accounts at an even more urgent pace. This demonstrates just how seriously dire the situation with the Euro zone banks is and how desperate they are to keep this mess from coming to light. Depositors and creditors deserve better than this.

The Euro zone banking system is headed for collapse."

Wed, 07/14/2010 - 08:16 | 467792 HelluvaEngineer
HelluvaEngineer's picture

Sorry, but I don't see any correlation between the tax credit expiration and mortgage demand, and I have a PhD in economics.

Wed, 07/14/2010 - 08:19 | 467797 Dr. Hannibal Lecter
Dr. Hannibal Lecter's picture

My Dear Friend,

You are an idiot.

Warmest regards,


Wed, 07/14/2010 - 08:37 | 467809 IE
IE's picture

I'm pretty sure engineer was being facetious.

Wed, 07/14/2010 - 08:46 | 467821 Boilermaker
Boilermaker's picture

I'm absolutely sure it was oozing with sarcasm.

Wed, 07/14/2010 - 14:35 | 468762 Steaming_Wookie_Doo
Steaming_Wookie_Doo's picture

I had a multiple sarcasm just reading it...

Wed, 07/14/2010 - 08:28 | 467801 willien1derland
willien1derland's picture


Wed, 07/14/2010 - 08:46 | 467824 pan-the-ist
pan-the-ist's picture

The pundits seem more inclined to simply ignore contrary facts and point out the captured / spun data.

Wed, 07/14/2010 - 11:01 | 468107 Ripped Chunk
Ripped Chunk's picture

Oh, I thought you were an engineer.


Wed, 07/14/2010 - 08:16 | 467793 Headbanger
Headbanger's picture

Looks like there's a lot more "price discovery" to be had in housing.. to the downside. Which translates to even lower household wealth and on and on..

Wed, 07/14/2010 - 08:33 | 467806 Rebel
Rebel's picture

Funny thing is that evan as the price of existing homes continues to degrade, the price of building a new home remains the same. Even though there is chaos in the real estate market, the price of a toilet at Home Depot does not come down, and a framer still gets $10 an hour to frame a house. In many areas there is little wiggle room in the actual cost of building a house. So, it appears to me, that in many areas if one were to build a house, the actual cost of building the house would be a lot more than what similar existing houses are selling for in the area (even assuming you act as "contractor" yourself). One would have to think that we have only just begun to see the carnage in unemployment in the construction sector.

Wed, 07/14/2010 - 08:38 | 467814 Edna R. Rider
Edna R. Rider's picture

Rebel, I agree, and my experience is the same.  Our contractor, who has about a hundred "clients" in our New England area, hasn't lowered rates despite his business dropping off by 25%.  He just employs fewer people.  The price of materials goes down (see lumber chart) but the cost of lumber at the HD is virtually the same.  Bernanke has been successful so far in keeping the price of everything the middle class buys WAY too high yet he has no ability to make our contractor friend hire more people or pay higher wages.  We have hit the golden age of being a well-established company where margins improve every quarter a little while revenue goes down a little every quarter and fewer jobs exist every quarter.  At some point even the Wall Street traders will figure this out and end demand will suddenly just dry up.

Wed, 07/14/2010 - 09:08 | 467877 Rebel
Rebel's picture

This is something that happened several years ago, but illustrates how supply/demand does not always drive price. In 2000 some of the things I was working on worked out well, and as a result, I bought an H1 hummer. Loved it, most fun car I ever had. Then about 2005, the price of diesel started really going up, and price of steel was going up at the same time. Since Diesel was getting expensive, and there were starting to be signs of economic distress, the demand for new hummers plummeted. Since demand was less, you would expect supply/demand to drive hummer prices down. However, at the same time the demand was dropping, the price of raw materials used in building hummers was increasing. Hence, hummer could not drop prices. Result was sales plummeted. Where I lived, the dealer was no longer able to sell hummers . . . he could not drop prices, and people would not pay the price he had to sell them at. Result was that he had to close the dealership. When he closed the dealership, I was no longer able to get my H1 serviced. So, I sold it on ebay, to someone in an area that still had a dealer. While I was able to sell the hummer while there was still a reasonable used market, I understand now that hummer was discontinued. This of course creates a big issue with anyone that owns one in finding a qualified mechanic to work on one of these rather unique vehicles.

While this is sort of an extreme example, I think it might serve somewhat as a "leading indicator". Lower demand will not necessarily lower prices for new things being built, if production costs are staying the same, or are increasing. The end result can be items we have enjoyed in the past are simply not available in the future.

In the case of housing, one wonders how many of today's builders will be left standing in 5 years. 

Wed, 07/14/2010 - 10:17 | 468007 PeterSchump
PeterSchump's picture

That's right.  In this type of environment, nothing gets built and there is no investment in productive capacity.  Now start printing $$$$$.  Let's see what happens.

Wed, 07/14/2010 - 12:50 | 468412 Kimo
Kimo's picture

Chinese and friends have taken up the slack in raw material demand.

Wed, 07/14/2010 - 09:57 | 467964 miker
miker's picture

BINGO!  You win the critical observation award.  The key to the Fed's/Treasury's strategy is to NOT let prices fall!  This is critical.  If they start falling, all bets are off as to how far  things will deflate.  The key to holding priceds is OIL!  Note how  oil continues to hold up?  This is not an accident.  Bushee #2 went over to Saudi Arabia twice during the meltdown, ostensibly to ask that oil didn't get too high in price.  That was the press cover.  He really made a personal appeal for the Saudis' to HOLD UP THE PRICE OF OIL via their network and production capabilities. 


Everything we make and use is tied to oil.  If oil drops signficantly, cost structures can drop.  If it hangs up, everyone has their hands tied.  Bernake is giving the suffering the worst possible mix.  By not allowing deflation to occur, he is ensuring consumption will drop because prices can't.

Wed, 07/14/2010 - 11:28 | 468180 Rebel
Rebel's picture

Nice analysis. The problem with their strategy is that you can artificially keep prices propped up, particularly by keeping oil/raw materials prices up, but you can not force people to purchase at those prices. Hence, watch for more manufacturers to go belly up. 

This is bad for those who have tried to be responsible for living within their means, saving, trying to preserve wealth through PMs and so forth. The bottom line might be that even if you preserve wealth, many of the things you would like to have are no longer being made.

Wed, 07/14/2010 - 12:40 | 468391 ElvisDog
ElvisDog's picture

And maintaing oil prices at an elevated level is deflationary, not inflationary. People spend more on oil, they have less to spend on other things. Economic activity decelerates and you have deflation.

Wed, 07/14/2010 - 08:18 | 467794 scatterbrains
scatterbrains's picture

These mortgage brokers push you to lock while not hedging themselves because the consumer protection laws allow clients to jump the rate lock and go to the next lowest offer..  so I guess they don't want to be caught holding the bag. This also means if you lock in low and rates creep back higher in that 30 day period they will find a reason to dump your ass quick... or so these are my suspicions.. any thoughts from guys in the industry ?

Wed, 07/14/2010 - 08:18 | 467795 ZeroPoint
ZeroPoint's picture

IMO, real estate in general needs to take a serious price correction. I offer the the Case-Shiller index as proof. People can't afford housing.


Wed, 07/14/2010 - 08:28 | 467802 HelluvaEngineer
HelluvaEngineer's picture

FWIW, I'm seeing a lot of foreclosures here in the Atlanta area selling for about 1.5x avg salary in the neighborhood.  Yet, the prices continue to decline.

Wed, 07/14/2010 - 08:31 | 467805 ZeroPoint
ZeroPoint's picture

What's the average salary for Atlanta out of curiousity? I also wonder about the demographics of the buyers of those properties. Is it actual families needing a place to live, or developers/investors?

Wed, 07/14/2010 - 08:37 | 467812 HelluvaEngineer
HelluvaEngineer's picture

In the city, there is a huge range.  I'd guess the avg is maybe 45k, but the median is probably much lower.  In the suburbs, it's another story.  The northern counties probably have an avg 75-125k salary, and many of those households are two income.

Wed, 07/14/2010 - 08:46 | 467823 Rogerwilco
Rogerwilco's picture

RE prices in the Atlanta metro area have fallen to depression levels -- 70% declines in some neighborhoods compared to the peak in '07.

Wed, 07/14/2010 - 08:50 | 467835 HelluvaEngineer
HelluvaEngineer's picture

I believe it.  The only people buying right now are value shoppers that have been sitting on cash waiting for this...not a large group.

Wed, 07/14/2010 - 09:23 | 467915 Tortfeasor
Tortfeasor's picture

Atlanta is still massively screwed.  Check out  Atlanta has the largest inventory of SFH + Condos of all metro areas in the country.  Higher than NYC or LA, with maybe 10% of the population of LA?

And this doesn't even take into account shadow inventory.  If there's an unnoticed black swan out there, my vote is for Atl housing.  Imagine the carnage if Atlanta went the way of Detroit?  Sherman will look like a community organizer by comparison.

Wed, 07/14/2010 - 12:28 | 468355 Strider52
Strider52's picture

Who in their right mind would buy a house NOW? Very few people can say for sure that they *can't possibly* lose their job. There goes the down payment, and every cent you poured into the house. Vanished.

 I can't shake the feeling, somewhat from reading ZH, but other things as well, that we are very close to something terrible happening. It will not take much to crash this House of Cards.

Disclosure: I own physical PM's, and I keep lots of dry powder. I have guns, lead, a 6-month store of (most) everything, and I rent.

Wed, 07/14/2010 - 08:19 | 467796 Sudden Debt
Sudden Debt's picture

In my country (Belgium) the young people that want to buy a house need to at least deposit 70.000 euro in advance. 2 years ago, they could lend 110%.

And then one wonders why housing goes down...

Wed, 07/14/2010 - 08:47 | 467826 cossack55
cossack55's picture

Any of those nice chalets along the river between Dinant and Namur for sale.  What price?

Wed, 07/14/2010 - 08:20 | 467798 jkruffin
jkruffin's picture

If even at sub-5% rates potential homeowners are not interested, it will take a whole lot of Intel CPU purchases to reverse the double dip in the economy as consumers refuse to purchase that primary bank balance sheet "asset."


It's not so much that they are not interested as their credit is shot and they can't buy a house now.  You can't buy a house without a job like you could in 2008 and prior.

Wed, 07/14/2010 - 08:55 | 467846 economicmorphine
economicmorphine's picture

I agree that their credit is shot but they are also not interested.  Strictly anecdotal, but I and everyone in my circle is playing defense.  We have no large purchases on the horizon.  FWIW, I own my home outright.  No mortgage.  No other debt.  I can borrow.  I have no interest in doing so and may never again.  I'm 50, for what it's worth.

Wed, 07/14/2010 - 09:23 | 467912 Rebel
Rebel's picture

Exactly! Today, the people who CAN borrow are smart enough to NOT borrow.

Wed, 07/14/2010 - 10:53 | 468085 dark pools of soros
dark pools of soros's picture

the credit hose has been crimped.. there are a still a few that have a favorable reason to refi with these interest rates but that will dry up soon

I bought my house last year and it looks like I can get a refi before the eventual double dip in housing prices start to cave.. now is the closest I will ever come to discount window like rates

Wed, 07/14/2010 - 13:32 | 468536 sullymandias
sullymandias's picture

Smart enough not to borrow? I can make a 5 to 1 leveraged bet at less than 5% interest that property values will increase in dollar terms over a 30 year period? Seems like a pretty good bet to me..

Wed, 07/14/2010 - 22:52 | 470086 Rebel
Rebel's picture

You are welcome to borrow. I choose to not be leveraged. Leverage has not worked out too well for a lot of people recently. Leverage requires you to have an assured cash flow to service the debt. In todays environment, nothing is certain. I would not borrow at 0% interest, as I can not be assured I would have the cash flow in the future to service the loan. 

Wed, 07/14/2010 - 12:57 | 468435 ElvisDog
ElvisDog's picture

Bingo. There is (almost) no better feeling than to own your own house in a decent neighborhood. Your worry horizon goes down to almost nothing. If I lose my job, I can pay the bills off of unemployment, which gives me 99 weeks to figure something out. If I was still paying my $2000 per month mortgage that would be anothe story.

Wed, 07/14/2010 - 08:24 | 467799 the not so migh...
the not so mighty maximiza's picture

"it will take a whole lot of Intel CPU purchases to reverse the double dip in the economy as consumers refuse to purchase that primary bank balance sheet "asset."


Nice..they should broadcast this concept with megaphones.

Wed, 07/14/2010 - 08:25 | 467800 jkruffin
jkruffin's picture

HOENIG coming up on CNBC in a minute,  let's see what he has to say before they release retail sales collapse.

Wed, 07/14/2010 - 08:29 | 467803 VK
VK's picture

And the BDI has collapsed once again by 4.5%, 34th day of declines. I'm sure this is bullish for the DOW and Chinese solars.

Wed, 07/14/2010 - 08:30 | 467804 johngaltfla
johngaltfla's picture

This should be good. When will the truth be revealed that has been hidden from the eyes of economists and politicians:

Unemployed people do not buy homes.

People who have had their hours or salary reduced 20-30% do not buy homes.

People with a credit score of 599 or less (25% of the population) should not qualify to buy a home.

Also in the "wow, look what we discovered" category, illegal aliens make horrible credit risks and often abandon the homes they buy, thus they can not buy homes any longer because the banksters finally figure that out, several hundred thousand foreclosures later.

Retirees or soon to be retired folks who lost 30% of their home equity can not sell their existing home to buy a new one.

And my favorite....

Retirees who listened to Bubblevision's experts or their broker who lost 50% of their portfolio from 1999-2010 are having to go back to work at minimum wage bagging groceries (true story here in Florida) just to survive and can not AFFORD to buy a new home, much less sell their old one.

Wed, 07/14/2010 - 08:33 | 467807 Internet Tough Guy
Internet Tough Guy's picture

Call them iHouses and raise the price 500%.

Wed, 07/14/2010 - 08:42 | 467817 willien1derland
willien1derland's picture

+10 - not to mention a Tyler inspired intel powered toaster!

Wed, 07/14/2010 - 08:49 | 467833 CosmoJoe
CosmoJoe's picture


Wed, 07/14/2010 - 08:37 | 467810 willien1derland
willien1derland's picture

Refinance applications accounted for 78.7% of all applications and 78.2% of the prospective loan volume. This is nearly unchanged from last week, when they were 78.7% and 78.2%, respectively. ARM applications accounted for 5.5% of all applications and 10% of prospective loan volume, up from last week's 5.4% and 9.9%, respectively.

Therefore, an inspiring 22% of mortgage applications were associated to home purchases -

Wed, 07/14/2010 - 08:37 | 467811 Sean7k
Sean7k's picture

Housing has two problems IMHO. One, it is still too expensive. Unless the banks allow their inventory to be resolved and at lower prices- the market cannot correct. However, if they do, they become under capitalized and the whole enchilada falls apart. Tough decision!

Two, we became accustomed to building houses with so many bells and whistles, complete with rewriting the building code, that we no longer have the ability to build a "legal" home that is affordable to the many Mcbuyers and their low wage job futures. If these new potential buyers are to ever have a chance at owning a home, we must revisit the building code and make many of it's sections voluntary with a opt out on responsibility from those that choose this route.

Wed, 07/14/2010 - 08:57 | 467853 economicmorphine
economicmorphine's picture

Banks were undercapitalized last year and all it took was an accounting rule change to fix everything.  If banks become undercapitalized again, maybe Dean Wormer could put them on double secret probation.

Wed, 07/14/2010 - 08:40 | 467815 HelluvaEngineer
HelluvaEngineer's picture

Bloomberg radio is now talking about shopping for boots.  OMFG.

Wed, 07/14/2010 - 08:42 | 467818 the not so migh...
the not so mighty maximiza's picture

"If you want a picture of the future, imagine a boot stamping on a human face—forever."

Wed, 07/14/2010 - 08:58 | 467855 economicmorphine
economicmorphine's picture

TThat's so James Taggart, dude.

Wed, 07/14/2010 - 09:07 | 467875 Rusty Shorts
Rusty Shorts's picture

Well, the shit is getting deep you know, might want to invest in some hip-waders.

Wed, 07/14/2010 - 08:41 | 467816 papaswamp
papaswamp's picture

Wow retail sales missed

Wed, 07/14/2010 - 08:47 | 467825 docj
docj's picture

So, who's going to start printing up the "We tried to re-inflate the housing bubble and all I got was a bill for $3,600,000,000,000... and this lousy T-Shirt" gear?

Wed, 07/14/2010 - 08:48 | 467831 SheepDog-One
SheepDog-One's picture

DOCJ +5!! Hillarious.

Wed, 07/14/2010 - 08:51 | 467837 cossack55
cossack55's picture

Do the shirts come in red, white and blue?  I am proud to be an American Debt Slave (ADS).

Wed, 07/14/2010 - 12:07 | 468291 Things that go bump
Things that go bump's picture

That could be printed on the back.

Wed, 07/14/2010 - 15:10 | 468868 Zero Debt
Zero Debt's picture

I just tried to restructure the debt on my house and all I got was a failed auction of all my lousy T-shirts and T-bills

Wed, 07/14/2010 - 08:47 | 467827 SheepDog-One
SheepDog-One's picture

Prior fancy-ass yuppies around here are now begging and failing to get $7/hour nite clerk convenience store jobs, and they wonder why houses aren't selling like its mortgage bubble mania again? Fact is, millions cant buy a house at ANY price! And who says everyone should always be running out buying houses at the drop of a hat? In this Brave New World, only a select few will be able to buy a house, and first the prices need to come WAY the hell DOWN!

We had a huge housing bubble and prices haven't dropped much at all, the crux of this whole 'bailout nation' BS has been to artificialy keep valuations for banksters balance sheets propped, and now they wonder 'HUH, hey why aren't houses selling'?

We got real problems, the geniuses can't see the forest for the trees.

Wed, 07/14/2010 - 09:09 | 467878 Internet Tough Guy
Internet Tough Guy's picture

Night clerk in a convenience store is a death sentence.

Wed, 07/14/2010 - 14:45 | 468799 Steaming_Wookie_Doo
Steaming_Wookie_Doo's picture

Yes, when you see extended families moving in together (8 people in a 2-3 BR place) just to make the rent, you know you're not going to see a house buying boom anytime soon.

The key is to deflate, wipe out the bad debts, start over--but that's what has to keep being delayed so that the biggest pigs can keep feeding at the trough.

Wed, 07/14/2010 - 08:48 | 467829 Mako
Mako's picture

It's called game over.  The Fed and government were able to slow the process of the decline but now you will just see slow death.

Wed, 07/14/2010 - 08:49 | 467832 willien1derland
willien1derland's picture

Not a huge supporter of CNBC - but this is a great article on Satyajit Das - who gets the quote of the day "Financial Botox"

Wed, 07/14/2010 - 08:52 | 467838 SheepDog-One
SheepDog-One's picture

WELL I'm sure it will all be spun as 'better n expected' somehow...meanwhile Im going to go print a few of Docj's 'We tried to reflate the housing bubble and all I got was a lousy $36 Trillion dollar bill' Tshirts.

Wed, 07/14/2010 - 08:55 | 467841 virgilcaine
virgilcaine's picture

This housing thing is going to last many years, prices went up for 50 years in housing and came to an end in 2005.

Prices don't come back, once the bubble has burst.  This is

the  credit cycle at the end of its journey.  Unless they can

build iphones large enough to live in and levarege against.

Wed, 07/14/2010 - 09:02 | 467862 economicmorphine
economicmorphine's picture

True, but prices don't have to come back.  They simply have to stabilize at a sustainable level.  When they do people will begin buying again.  By sustainable, I mean based on the historical norm vs. the cost of renting.  The days of flipping and multiple homes are over, but that doesn't mean housing will be dead forever.  Actually, if you think about it, housing is way ahead of most other sectors of the economy on the recovery path.  

Wed, 07/14/2010 - 09:33 | 467933 Tortfeasor
Tortfeasor's picture

Wrong on quite a few levels.  We built our economy on the price of housing continuing to inflate ad nauseum.  How many 50+ y/o molded their lives around the same concept.  This is not akin to a 90s era housing bust...this is a multi-generational event, worse than the great depression.

Wed, 07/14/2010 - 11:17 | 468148 kaiserhoff
kaiserhoff's picture

Quite right.  It was a major misallocation of capital, but so was most of the cash that went into the increased spending on health care and government.  Nearly all the capital was sucked into nonproductive or counterproductive activities.  That's why there are no jobs, and almost no growth.

Wed, 07/14/2010 - 12:59 | 468437 ozziindaus
ozziindaus's picture

Housing was never considered an investment, but rather, a utility. That's why they only appreciated 2-3% above inflation for the past 100 or so years. 2000 changed the rules. 2006 spanked the rule change.

Wed, 07/14/2010 - 12:42 | 468397 Strider52
Strider52's picture

That's the Solution! Re-package all foreclosures and empty houses as "iHouse 4G". People would be lined up for those!

Wed, 07/14/2010 - 08:59 | 467856 plocequ1
plocequ1's picture

Maybe people are refinancing their Macbook Pros.

Wed, 07/14/2010 - 08:59 | 467857 dan22
dan22's picture

Wenzhou, a private business owner told reporters: "Now the rich are doing real estate, we all feel priced out of the market because of speculator groups.Ningbo is a garment producer in Ningbo Tianyi Square business district. The clothing brand is selling the old business, in order to move into the real estate business. From the hundred private enterprises in Zhejiang Province that are included in the survey, only 30 are not involved in the real estate development business , while the remaining 70 companies have at least part of their activities in the real estate market. The list includes” the Younger four.


A Look at Zhejiang Province, One of the Main Centers of China’s Real Estate Bubble

Wed, 07/14/2010 - 09:04 | 467869 Remington IV
Remington IV's picture

Anyone want a 1-BR 750sf  for $499,000 , near the UN ?????

Wed, 07/14/2010 - 09:11 | 467884 Boilermaker
Boilermaker's picture

I'll trade you a 5 bedroom, 3 bath, with a fenced yard in Pontiac, Michigan for $1 (and no, I'm not kidding).

Wed, 07/14/2010 - 09:42 | 467950 aheady
aheady's picture

2BR 2.5BA waterfront home on the bay - Eastern Shore of Virginia... $370,000... no kidding here either.

Wed, 07/14/2010 - 10:50 | 468075 Ungaro
Ungaro's picture

4 bedroom, 3.5 bath new construction show home $600,000 below assessed value, $500K below cost of constructon, only $1,199,000 in Liberty Lake, WA (half way between Spokane, WA and Coeur d'Alene, ID. Check it out at

Wed, 07/14/2010 - 13:37 | 468553 RichardP
RichardP's picture

Nice presentation. I like the music.

Wed, 07/14/2010 - 18:32 | 469526 Trailer Trash
Trailer Trash's picture

How about a beautiful house, low water front on an island in the south Puget Sound (WA)?

Wed, 07/14/2010 - 09:18 | 467902 zhandax
zhandax's picture

OK, serious question here....I am now at the point I can save about $100 a month in house payments if I refi (with no points or origination).  I saw the post here about supporting the local banks rather than the TBTF, and found one the next town over on the list.  I stopped by their office and asked for a mortgage rate list.  It shows on the list that they originate their conforming loans for USBank (who I do and have banked with since they were FirstStar).  And partiurlarly since this will be plain vanilla conforming, this is likely going to Freddie/Fannie so is changing banks really accomplishing anything?  These guys are so new on the TBTF list, they are proabaly just realizing what they have a license to steal.  It is not that big a pain to change, but is this really making that much of a statement?  Or is it all so interlinked that the only recourse is putting all your cash in gold in the basement?

Wed, 07/14/2010 - 09:51 | 467957 AllYourBaseAreB...
AllYourBaseAreBelongToUs's picture

(Note to self: zhandax keeps his gold in his basement.)

Where'd you say you lived again?

Wed, 07/14/2010 - 09:53 | 467960 jkruffin
jkruffin's picture

The best thing is to go through a local credit union if you have that ability. You will be the best rate on the market more than likely.  But if you do not have that option, find out from your bank which banks they use to service their loans.  If they use a TBTF, tell them no thank you and the reason why, and walk out the door.  Just make sure, if you get a bank that is a non-TBTF make sure you have them put in the loan documents, that the loan cannot be sold to another entity and you can specifically name them.  You don't want Wells Fargo, Citi, BofA, or Chase servicing your loans anytime.  If you can use a credit union, you won't have to worry about it at all.

Wed, 07/14/2010 - 09:20 | 467905 virgilcaine
virgilcaine's picture

new Ihouses...luvit.

Wed, 07/14/2010 - 09:29 | 467926 -Michelle-
-Michelle-'s picture

I do not understand the continued mystified comments of "nobody's refinancing even though rates are at record lows."

Until the banks start letting underwater mortgage holders refinance without having to get their LTV down, nobody's going to refinance.

Wed, 07/14/2010 - 11:09 | 468130 Ripped Chunk
Ripped Chunk's picture

Exactly. If you bought between 2003 and 2007 you probably are not sitting on 20% equity. Probably much less than that. If you bought before 2003, you have a low rate.  

Wed, 07/14/2010 - 11:10 | 468132 Assetman
Assetman's picture

Spot on with the observation, Michelle.

At this point in the cycle, there are too many people with mortgages that are underwater-- and really no amount of refinancing on rates is going to sure the ills.  At issue is that... not only are LTV's too high, but the Obaminators have went out of their way to make sure that the "value" part of the equation remains artificially inflated.  It's policy for the insane, especially in the context of high unemployment and shrinking incomes.

And, of course, most mortgage servicers loath the day they take any losses on a short sales and/or valuation negotiation.  They seem more receptive to the long drawn out process of foreclosure.  And from a policy perspective, instead of attacking the downstream of the mortgage market, they pull in demand from the future-- only to see a pocket of no demand appear on its doorstep.  The latest round of weakness was highly predictable.

Wed, 07/14/2010 - 09:34 | 467935 Species8472
Species8472's picture

lowest level since December 1996


what's wrong with that? '96 was a fine year!

Wed, 07/14/2010 - 09:41 | 467936 virgilcaine
virgilcaine's picture

If you look at the true cost, 5% Mtg rates and a 10% decline estimate.. the real rate is 15%. Not such a deal afterall.  Levearege only works on the way up.

Add in taxes, insurance and utilites.. Its a liability,  until its transferred  back to the bank.  Bank puts back on the Mkt.. transfer liability.. and on it goes.

Wed, 07/14/2010 - 09:58 | 467969 ozziindaus
ozziindaus's picture

If they'd allow undewater suckers like me to Refi, that curve may have a chance of moving up.

Wed, 07/14/2010 - 10:31 | 468036 augmister
augmister's picture

Simple solution...bring back that "fantastic $8K mortgage credit"!!!  The government will gladly give you a credit today and you can be sure your equity will be down another 30% in three to five years!   Awesome.  The Government and Banks are glad these dopes never took a course in economics...  Maybe soon to be Justice Porky Kagan will ban economics along with the 1st Amendment?   Brilliant!

Wed, 07/14/2010 - 10:47 | 468065 Bam_Man
Bam_Man's picture

Kagan is Jewish, so "Justice Porky" doesn't work.

Perhaps "Justice Matzohball". 

Wed, 07/14/2010 - 10:33 | 468041 wyosteven
wyosteven's picture

In my estimation (non professional, but who is in the RE racket?) I'm waiting for another 50%+ decline in housing before I budge.

Walking into half million dollar homes with a pocket full of cash usually gets the broker's attention, but yet it's the sellers whom are dillusional and holding out. 

Anyone purchasing a house right now on credit is an f-ing idiot.  You will lose your ass.   I retract this statement when interest rates are around 2.5% (or less) for a 30 year.  I am confident rates are heading there.

Wed, 07/14/2010 - 10:47 | 468069 BoilerHorn
BoilerHorn's picture

A local (Austin, TX) mortgage broker noted that rates have been dropping since the $8k credit expired and the fed slowed its monetization.  The demand for borrowing drops and, as you might expect, the cost of borrowing drops.

Wed, 07/14/2010 - 10:54 | 468090 markar
markar's picture

Anyone purchasing a house right now on credit is an f-ing idiot.  You will lose your ass.   I retract this statement when interest rates are around 2.5% (or less) for a 30 year.  I am confident rates are heading there.


A bit contradictory statement, don't you think? It could be argued it is better to buy when interest rates are higher, enabling prices to rise when they drop and you can refi at lower rates.

Sat, 08/14/2010 - 10:42 | 521605 herry
herry's picture

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