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Worst Month For Mortgage Applications Since 2009 Driving Mass Layoffs

Tyler Durden's picture





 

This morning's 11.5% week-over-week plunge in mortgage applications is the fourth week of fading demand in a row as it appears the bloom is very much off the rose of the second-coming of the housing bubble. This makes it the worst plunge in mortgage applications since June 2009 and the lowest level of activity since December 2011. Wondering how this is possible? We explained in detail here but this collapse in mortgage demand fits perfectly with Mark Hanson's insights that a number of "large private mortgage bankers had mass layoffs last Friday to the tune of 25% to 50% of their operations staff." This all feels very deja vu all over again.

 

Chart: Bloomberg

As Mark Hanson notes,

This morning I was made aware that three large private mortgage bankers I follow closely for trends in mortgage finance ALL had mass layoffs last Friday and yesterday to the tune of 25% to 50% of their operations staff (intake, processing, underwriting, document drawing, funding, post-closing).

 

This obviously means that my reports of refi apps being down 65% to 90% in the past 3 weeks are far more accurate than the lagging MBA index, which is likely on its' way to print multi-year lows in the next month.

The concerning picture is the following:

So if the fast 'dumb-chasing-fast' money is leaving the building (as we explained here), then given this plunge in 'real' mortgage apps, it is not a stretch to expect the new home sales to fill that gap...

 


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Wed, 06/05/2013 - 09:10 | Link to Comment Mentalic
Mentalic's picture

Man !! I have been so used to iOS and Android Apps. for a second I was wondering what kind of app is this and for which OS? :-)

 

 

Wed, 06/05/2013 - 09:11 | Link to Comment Spider
Spider's picture

Anybody know the URL for the bloomberg chart on Mortgage applications?

Would be greatly appreciated!

Wed, 06/05/2013 - 09:30 | Link to Comment kliguy38
kliguy38's picture

that Malinvestment thing is a bitch aint it Bernank.......you can float a turd only so long before you have to eat it Ben......gl

Wed, 06/05/2013 - 09:37 | Link to Comment azzhatter
azzhatter's picture

LIESman was chewing on that turd this morning

Wed, 06/05/2013 - 09:41 | Link to Comment Beam Me Up Scotty
Beam Me Up Scotty's picture

"that Malinvestment thing is a bitch aint it Bernank.......you can float a turd only so long before you have to eat it Ben......gl"

Ya they should stop wasting their money shorting gold, and turn the hose back on in the treasury market.  Other option is to print even MOAR and deal with both problems.  How many plates can Bernanke juggle before he drops them all?

Wed, 06/05/2013 - 09:52 | Link to Comment the not so migh...
the not so mighty maximiza's picture

he is outta here, so i guess he does not give a shit

Wed, 06/05/2013 - 09:11 | Link to Comment EscapeKey
EscapeKey's picture

I see no mention of this on Marketwatch.

Funny, that.

Wed, 06/05/2013 - 09:19 | Link to Comment Handful of Dust
Handful of Dust's picture

Zynga Posts Record High Lay-Offs; More to Come

 

 

Shares of Zynga (ZNGA) were rocked yesterday on news that the maker of games no one plays anymore would be laying off 18% of its work-force. The roughly 520 layoffs represents a 3.5x increase over the number of employees the company dumped last fall.

 

 

http://finance.yahoo.com/blogs/breakout/zynga-posts-record-high-lay-offs...

 

Yes...well...they did say it is a "Jobless Recovery".....

Wed, 06/05/2013 - 09:58 | Link to Comment moonman
moonman's picture

The beauty in that headline is that the vacumn tubes only read the first 4 words.

BULLISH

Wed, 06/05/2013 - 13:56 | Link to Comment JuliaS
JuliaS's picture

They should lobby for virtual farm subsidies, start harvesting virtual ethanol... or grow virtual weed for vitrual export. Methlabville - now there's a fresh idea!

They can get paid in bitcoin.

Wed, 06/05/2013 - 10:12 | Link to Comment Kaiser Sousa
Kaiser Sousa's picture

dumb ass americans will never learn...green shoots.......

“The economy is doing a lot better,” Nancy Bush, 56, of San Francisco, said in a follow-up interview. “I feel very encouraged, and maybe it’s just a gut feeling, but I think we’ve made it through a four- or five-year recovery.”

 

"Bush, who is taking a break from her career to raise her children, says she believes that an era of roller-coaster economics has given way to a more stable environment. And the former finance and real estate professional says she sees an improving labor market.

The U.S. has created an average of 196,000 jobs a month this year, government data compiled by Bloomberg show. In the poll, 60 percent of respondents say they don’t need to find a better job. “I feel like work’s out there and I can get a job, if I need to or want to,” Bush says."

 

In St. AlbansNew York, Elizabeth Talamas, 39, says the value of her family’s home has rebounded from its low point amid the 2008 financial crisis.  “We’re really happy it’s back to where it was,” says the stay-at-home mom. “Now, if we have to sell, we’ll get at least what we paid for it.”

http://www.bloomberg.com/news/2013-06-05/americans-more-secure-in-poll-as-60-see-no-need-for-better-job.html


Wed, 06/05/2013 - 10:43 | Link to Comment kchrisc
kchrisc's picture

What are the odds that Ms. Bush even exists?

I say 50/50. Anyone else care to wager?

Wed, 06/05/2013 - 10:54 | Link to Comment Dull Care
Dull Care's picture

Not really Mrs. Talamas.

These people are super myopic but then again I also question whether they are real.

Wed, 06/05/2013 - 10:59 | Link to Comment The Carbonator
The Carbonator's picture

Maybe those soccer moms need to actually try looking for a job.  What they 'feel' is irreleveant.  What is relevant is how long they have been out of work, and whats the demand (fake or not) for the profession they had before.

 

My wife has been looking for over 6 months.  She has a degree in Finance and 10 years experience in GE (Human Resources).  Still looking, though she has an interview today at a local bank.  She took 7 years off to raise 2 kids, now getting a job is quite difficult because she has been out of work for so long.

 

Ms Bush & Talamas need to ask their husbands whats really going on in the workforce on a day to day basis, that is assuming that they have actual husbands and are not merely married to an EBT card.

Wed, 06/05/2013 - 11:31 | Link to Comment TahoeBilly2012
TahoeBilly2012's picture

What a women "feels" is certainly relevant and what she "thinks" is dangerous, so wear a helmet and some padding. 

Wed, 06/05/2013 - 11:38 | Link to Comment The Carbonator
The Carbonator's picture

Haha  +1

 

Very true.

Wed, 06/05/2013 - 12:10 | Link to Comment Meatier Shower
Meatier Shower's picture

This is the real reason why women make less money than men on average.

Wed, 06/05/2013 - 11:48 | Link to Comment tip e. canoe
tip e. canoe's picture

notice the memes gloomberg is pimping and who they're using to pimp them : middle-aged (white?) women.   also notice that the sole dissent comes from a middle-aged (white?) man.

reflexivity rules the rooster?

Wed, 06/05/2013 - 23:30 | Link to Comment kareninca
kareninca's picture

Yeah.  They asked people who don't work, and who aren't looking to work.

Well, they'll get cheery answers that way.

If these women in fact exist.

Wed, 06/05/2013 - 09:12 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

Maybe we're not doing this right.

Wed, 06/05/2013 - 09:29 | Link to Comment Rainman
Rainman's picture

Right. Time to fire up the old NINJA machine !

Wed, 06/05/2013 - 09:48 | Link to Comment SamAdams
SamAdams's picture

The Pomo Ninja is going to roundhouse kick reality back into feudal serfdom where it belongs. It will then uppercut Djia to the moon!

I may have the sequencing backward, which is why this sort of thing is best left to Pomo Ninja!

Wed, 06/05/2013 - 09:12 | Link to Comment Translational Lift
Translational Lift's picture

OT...so...is the "market" open today??  +11 minutes and still quoting futures........

Wed, 06/05/2013 - 09:13 | Link to Comment EscapeKey
EscapeKey's picture

???

um yes, it'll open in 17 minutes, same as it always does...

Wed, 06/05/2013 - 09:14 | Link to Comment fonzannoon
fonzannoon's picture

LOL some of us have gone so crazy we are operating in the future.

Wed, 06/05/2013 - 09:24 | Link to Comment EscapeKey
EscapeKey's picture

that must be why i see so many "Gold $10,000" posts...

Wed, 06/05/2013 - 09:26 | Link to Comment Ignatius
Ignatius's picture

Or a blast from the past...

How many here are seeing the Bluestar Jet leasing banner ads?

Hot tip:  "Bluestar loves Zerohedge...."

Wed, 06/05/2013 - 09:15 | Link to Comment Translational Lift
Translational Lift's picture

My bad...........TX 

Wed, 06/05/2013 - 09:14 | Link to Comment digitlman
digitlman's picture

Not 9:30am est yet...

Wed, 06/05/2013 - 09:12 | Link to Comment FLUSA.com
FLUSA.com's picture

Every buy side of the transaction I represent is Cash and every sale is financed....this leads me to think a lot of people paying cash are going to be holding property longer then they wanted or have to discount to sell.  And if they try to rent the rates are going to come down as a lot of competition has entered the market

Wed, 06/05/2013 - 09:15 | Link to Comment duo
duo's picture

If using debt to buy a non-productive asset is considered inflationary, then we have some serious inflation waiting in the wings.

 

Wed, 06/05/2013 - 09:12 | Link to Comment Scro
Scro's picture

Damn it, I just purchased 3 condos in Florida last week.

Wed, 06/05/2013 - 09:24 | Link to Comment disabledvet
disabledvet's picture

next time stick to a housing start.

Wed, 06/05/2013 - 09:37 | Link to Comment azzhatter
azzhatter's picture

and you haven't flipped them yet. Speed up there Cowboy

Wed, 06/05/2013 - 09:44 | Link to Comment Scro
Scro's picture

It should be all good as long as I have my job at the mini-mart.

Wed, 06/05/2013 - 09:15 | Link to Comment SheepDog-One
SheepDog-One's picture

Must....Apply....for Moar....Mortgages....30 yr....Debt Load.....badly needed....With Interest plz.....arrrghhhhh...

Wed, 06/05/2013 - 09:15 | Link to Comment yabyum
yabyum's picture

Funny this. The folks I know in RE say it has not been this busy in five years. (SLC, Ut)

Wed, 06/05/2013 - 09:23 | Link to Comment SheepDog-One
SheepDog-One's picture

Really? My whole family is in real estate and I've never seen them more gloomy. They haven't turned a dime in months.

Wed, 06/05/2013 - 09:28 | Link to Comment Darth Stacker
Darth Stacker's picture

I know all RE is local, but in central Florida things are getting frothy again

Wed, 06/05/2013 - 09:46 | Link to Comment FLUSA.com
FLUSA.com's picture

You probably live in Orange County and sale are up @8% yr over yr (MAY) for sales of SF.  The hot markets are still hot.  However, Lake County has seen a 10% drop in SF home sales YOY and building permits have dropped the last 3 month.

Wed, 06/05/2013 - 09:32 | Link to Comment Tenshin Headache
Tenshin Headache's picture

You need to read the earlier article on the high level of participation by hedge funds paying cash and buying up entire tracts of residential homes (at the ask). No mortgage needed there and hey, price gets a kick. That game is now unwinding.

SLC is a bit of a special case, too, I'd say. Wonderful city, lived there for 5 years.

Wed, 06/05/2013 - 10:28 | Link to Comment TheMeatTrapper
TheMeatTrapper's picture

Remember, both Goldman and NSA are investing heavily there. 

Wed, 06/05/2013 - 09:15 | Link to Comment fonzannoon
fonzannoon's picture

My buddy is a real estate attorney and he said his phone has been ringing off the hook with people flipping out at these levels. Imagine if rates go to 4.5% OH MY GOD

Wed, 06/05/2013 - 09:22 | Link to Comment OpTwoMistic
OpTwoMistic's picture

Your buddy say if these were cash deals?

Wed, 06/05/2013 - 09:30 | Link to Comment fonzannoon
fonzannoon's picture

some. the clients he is referring to though are ones that are going into contract but have not secured a rate yet.

Wed, 06/05/2013 - 09:21 | Link to Comment Handful of Dust
Handful of Dust's picture

Wait until rates hit 7%.....action, camera, PANIC !!!!!!!!!!!!!!!!!!!!!!!!

Wed, 06/05/2013 - 09:40 | Link to Comment Cursive
Cursive's picture

@Handful of Dust

 

Unpossible.  The Fed will let SPX, RUT, DJI sink to zero and no credit creation before that happens.  Too high rates would bankrupt the Fed.

Wed, 06/05/2013 - 09:21 | Link to Comment Smegley Wanxalot
Smegley Wanxalot's picture

This can't be true because Yahoo says otherwise.

cough cough

Wed, 06/05/2013 - 09:42 | Link to Comment Cursive
Cursive's picture

Yeah, they ran a story yesterday about how America is still tops in incomes and housing.  LOL.

Wed, 06/05/2013 - 09:22 | Link to Comment yogibear
yogibear's picture

That light at the end of the tunnel happens to be a nuke going off.

Wed, 06/05/2013 - 09:28 | Link to Comment Winston Churchill
Winston Churchill's picture

Double flash ?

Just waiting  on the shockwave.

Wed, 06/05/2013 - 09:26 | Link to Comment Bearwagon
Bearwagon's picture

"Theres mud in the water, Roach in the cellar, Bugs in the sugar, Mortgage on the home, Mortgage on the home.

There's garbage on the sidewalk, Highways in the back yard, Police on the corner, Mortgage on the car, Mortgage on the car.

They're selling independence, Actors in the White House, Acid indigestion, Mortgage on my life, Mortgage on my life."

Creedence Clearwater Revival, 'Ramble Tamble': http://www.youtube.com/watch?v=LtURmn_knzA

Wed, 06/05/2013 - 09:30 | Link to Comment Village Smithy
Village Smithy's picture

And I wonder who will stop the rain.

Wed, 06/05/2013 - 09:59 | Link to Comment Oleander
Oleander's picture

 

I wonder who'll stop Lorraine

Wed, 06/05/2013 - 09:32 | Link to Comment Joe Davola
Joe Davola's picture

Keep on chooglin.

Wed, 06/05/2013 - 09:35 | Link to Comment Bearwagon
Bearwagon's picture

"If you can choose it, who can refuse it, Y'all be chooglin' tonight!"  ;-)

Wed, 06/05/2013 - 09:29 | Link to Comment gdogus erectus
gdogus erectus's picture

Stil hot in San Jose where around 1/3 of the sales are to Chinese carrying cash.  No, really.

Wed, 06/05/2013 - 09:35 | Link to Comment yogibear
yogibear's picture

Guess getting burned by buying ghost city real estate in China wasn't enough. 

 

Wed, 06/05/2013 - 09:30 | Link to Comment B2u
B2u's picture

but.....but....isn't housing recovering?

Wed, 06/05/2013 - 09:30 | Link to Comment j0nx
j0nx's picture

Just hold it together for 3 more weeks until I close on my hovel and offload it to the next sucker. Then I rent for the indefinite future and wait for the rates to skyrocket and then swoop in and buy a SFH in a good neighborhood for 60% off prime. No more illegal alien/section 8 neighbors for me when I dump this place.

Wed, 06/05/2013 - 09:37 | Link to Comment docj
docj's picture

Wow - ZH is just filled to bursting with the pungent aroma of deepening RECOVERY today.

Take a nice, deep breath through the nose, fellow serfs.

Wed, 06/05/2013 - 09:48 | Link to Comment SheepDog-One
SheepDog-One's picture

Like the Blowhorn announced this morning...'We shouldn't bee seeing these kind of numbers this far into the miraculous RECOVERY!' But as Maria Fartaroma then reminded us...'It's ALL a WIN!'

Wed, 06/05/2013 - 09:39 | Link to Comment MFLTucson
MFLTucson's picture

Who cares about these facts so long as the Beige book of games looks good?

Wed, 06/05/2013 - 09:41 | Link to Comment Cursive
Cursive's picture

I was recieving daily unsolicited refi calls the last two weeks.  This week?  Zero.  They're probably filing unemployment right now.

Wed, 06/05/2013 - 09:44 | Link to Comment FreeNewEnergy
FreeNewEnergy's picture

Plain and simple, any mortgage for more than 75% of a property and for a term any longer than 15 years at 5% or higher is stupidity, which is why we have so many problems. Lots of stupid people taking and making loans.

When this all crashes and burns, look for mortgages with no less than 25% down, 20 years at 4% to be the new normal. And, prices will be much lower for residential real estate. Figure on 2015 at the earliest before the big reset.

Smart people will be paying 50% down on properties they can actually afford. With the glut of REO shadow inventory still enormous, there will be oodles of fixer-uppers. Anecdotally, I took a drive around my neighborhood - nice, suburban, stable, outside Rochester, NY (a place called Irondequoit). Two to three homes on every sidestreet vacant (lawns not mowed, no curtains in windows, etc.). Average two more per street up for sale. What they've been saying about low inventory is a fantasy, created by the confluence of REO kept off the market and "investors" buying up foreclosures en masse.

Once the own-to-rent crowd gets their asses kicked hard and foreclosures start picking up again (if the banks deem this necessary), you're going to see a very broken down RE market. The mortgage crisis was never fixed, merely papered over, and the banks have dragged out the process so that this mini-bubble has appeared and is now bursting. Gonna be fun to watch.

Real estate is going to be a great investment once the median existing home price falls another 20-30% over the next few years. Get your cash ready if you're looking for a McMansion fixer-upper on 3-4 acres. Perfect way to start a small farm and/or home business. That's what I'm looking for.

Wed, 06/05/2013 - 23:43 | Link to Comment kareninca
kareninca's picture

I'm seeing lots of foreclosures in rural CT and RI.  Like upstate NY, these are areas that TPTB don't notice, don't care about, don't care about inflating.  The hedge funds don't even know they exist; the flippers are very rare.  So, no fake new bubble.

A mini farm sounds great, but in a McMansion fixer-upper?  The McMansions I've seen were not built to last:  they are made of Chinese drywall and strange manufactured crud.  I've read that the best houses were built between the two world wars, because there was no shortage of good quality material then.  Those houses are solid and can last forever.

Wed, 06/05/2013 - 09:46 | Link to Comment SheepDog-One
SheepDog-One's picture

Must....Pump....Housing Bubble 2.0....Pump oar DIE!...

Wed, 06/05/2013 - 09:46 | Link to Comment orangegeek
orangegeek's picture

Dow Jones is crashing - down 35 points.

 

More gong show please.

Wed, 06/05/2013 - 09:49 | Link to Comment SheepDog-One
SheepDog-One's picture

Hell take the little miracles!

Wed, 06/05/2013 - 09:51 | Link to Comment syntaxterror
syntaxterror's picture

Hard to apply for a mortgage when there's practically nothing available to buy. Just stop paying if you do have one because "hope and change" will allow you to remain indefinitely.

Wed, 06/05/2013 - 10:25 | Link to Comment gatorengineer
gatorengineer's picture

This afternoon watch the market front run the massive Pomo tomorrow....

Wed, 06/05/2013 - 10:29 | Link to Comment fonzannoon
fonzannoon's picture

good point.

Wed, 06/05/2013 - 10:57 | Link to Comment Meremortal
Meremortal's picture

The real estate market is starting to remind me of 1982-4, what the talking heads were calling at the time a "rolling recession". Somes states were doing well, others badly. Market in Denver is on fire, multiple offers above listed prices, and these aren't cash deals but mostly normal mortgage sales. Inventory is very low due to almost no residential construction for years. 

Texas market chugging along also, but then it's been the most consistent market right through the 2nd Great Depression, which has years left to run. 

Gas royalties rising fast in Texas, bringing good income to mineral rights holders as Chesapeake and XTO are going back to full production on wells that were virtually shut-in due to low prices. My royalty checks are up 4 fold over a couple of months ago.

It's starting to look like a balkanized economy out there.

 

 

Wed, 06/05/2013 - 11:23 | Link to Comment Stuck on Zero
Stuck on Zero's picture

The charts just mean that it's Wall Street capital buying the homes, not private individuals with mortgages.

 

Wed, 06/05/2013 - 11:48 | Link to Comment Meremortal
Meremortal's picture

Not true in Colorado and Texas, don't know about other areas.

Mortgages being originated to normal buyers in those two states. There are also some cash buyers, but they are buying cruddy foreclosures and renting or flipping them, slowly cleaning out that part of the market.

Residential inventory in Denver area is 1/3 of typical. Rental market is tight as hell, and rents are up.

 

Wed, 06/05/2013 - 12:40 | Link to Comment IamtheREALmario
IamtheREALmario's picture

So, like would it be a big surprisde to anyone that when free money is pumped into funds for the sole purpose artificially increasing the price oof real estate that free market dynamics actually decrease the demand for real estate. It ONLY pays bankers to bite the invisible hand that feeds it. Everyone else suffers.

Price does matter.

IMO, Japan did the right thing by allowing deflation to take hold. They, like the US, then did the wrong thing by moving a large percentage of their manufacturing to China ... which then became artificially stimulated. Abe cannot fix the problem by creating inflation. It will only make it worse because, as with this housing manipulation demand will suffer.

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