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Mortgage Applications Collapse To Lowest In 19 Months

Tyler Durden's picture




 

Once again it seems cash is king if the housing recovery is to continue. Despite the surge in prices that we saw yesterday that reflected the long-forgotten days before mortgage rates exploded, the housing recovery meme remains loud and proud. But, mortgage applications are now down for 7 of the last 8 weeks and have collapsed a stunning 29% over that time. - the biggest plunge in 30 months. It appears that the 'rational' buyer has decided that higher rates are not the factor that drives them to snap up that surging priced home? Is it any wonder, as we noted here, in spite of being told every day how 'affordable' housing is with rates this low, their real purchasing power (given a limited budget as opposed to free money-based finance) has plunged by 16% (for now).

 

 

 

As a reminder...

 

Charts: Bloomberg

 

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Wed, 06/26/2013 - 09:50 | 3694400 SheepDog-One
SheepDog-One's picture

But....but....but....

Oh well, as long as we can manipulate stawks green that's all that really matters anyway.

Wed, 06/26/2013 - 10:27 | 3694577 Spigot
Spigot's picture

No one is going to take on a mortgage knowing full well that the market price of the RE will quickly drive them under water.

"Hey! I've got a noose over here! Anyone want to use it?!?"

Wed, 06/26/2013 - 10:36 | 3694662 derek_vineyard
derek_vineyard's picture

in a few months this number will be down 75%.   who would buy a house today?   cash investors---NO (they know current interest rates just ended the appreciation party)           

Wed, 06/26/2013 - 10:52 | 3694796 Doubleguns
Doubleguns's picture

Living under a bridge requires no mortgage, neither do tents or park benches. 

Wed, 06/26/2013 - 10:54 | 3694816 WayBehind
WayBehind's picture

IMO it is always better to own (expensive) land than being stuck with worthless (cash) currency ...

Wed, 06/26/2013 - 14:37 | 3696147 boogerbently
boogerbently's picture

Now THERE'S a surprise.

Interest rates up means mortgage apps down.

Who'd a thunk it?

Interest rates will drop, QE will intensify, gold will soar.

Long, Kool-Aid cups !

Wed, 06/26/2013 - 10:41 | 3694699 slaughterer
slaughterer's picture

"POMO Ramp" auf Scheiss-data.  So was wird erwartet.  

Wed, 06/26/2013 - 09:48 | 3694401 CrimsonAvenger
CrimsonAvenger's picture

I used Lendingtree to check out rates earlier this week, and like a dumbass I put in my real phone number. I must have gotten over 75 sales calls in two days - and no, I'm not exaggerating. These guys are desperate.

Wed, 06/26/2013 - 09:57 | 3694437 NoDebt
NoDebt's picture

A LendingTree pop-up add just appeared on my screen as I was reading your post.  Spooky.

I clicked on it just so the Tylers would get their chit, but I punched out as soon as the page popped up.

Funny to watch the talking heads on CNBC nervously talk about how rates "don't matter" and "people are buying because the economy is getting better."  Uh huh.  Give it a few months for reality to set in.

Q1 GDP growth back down in the 1s (revised lower today, just in time for everyone to not give a shit)

PCEs ar at like ZERO growth

Wages?  Don't make me laugh.  Still dead-flat, like they have been for 10 years.

AND....... WAIT FOR IT!...... Interest rates spike 100 bps in a month.

Nah, nothing can derail this housing recover.  Not even money.

Wed, 06/26/2013 - 10:27 | 3694585 Spigot
Spigot's picture

pump monkeys one and all

Wed, 06/26/2013 - 10:30 | 3694609 imapopulistnow
imapopulistnow's picture

Not to worry, the phone calls will die down in about 3 or 4 weeks.....

Wed, 06/26/2013 - 10:37 | 3694674 syntaxterror
syntaxterror's picture

I went to Lendingtree and put in 100 different random phone numbers. 

Wed, 06/26/2013 - 19:39 | 3697252 Spigot
Spigot's picture

No! Dude! Put in all the Congress' asses #'s, Supremes AND the White House, to boot. God, that would be delicious.

Wed, 06/26/2013 - 09:48 | 3694402 CH1
CH1's picture

Wait! You mean flipping isn't the royal road to wealth?

Wed, 06/26/2013 - 09:48 | 3694403 Stoploss
Stoploss's picture

Fortunately, higher rates will help this..

 

No??

Wed, 06/26/2013 - 09:50 | 3694408 Charles Nelson ...
Charles Nelson Reilly's picture

I shit you not.... I put my house on the market the day that asshole opened his big mouth and said they were going to taper.  The bottom is dropping out and I'll be lucky to sell the fucking place.

Wed, 06/26/2013 - 09:51 | 3694414 SheepDog-One
SheepDog-One's picture

Trade ya for a pallet of .223's?

Wed, 06/26/2013 - 09:56 | 3694434 Headbanger
Headbanger's picture

Are you crazy!? Don't you dare!

Wed, 06/26/2013 - 10:27 | 3694580 SheepDog-One
SheepDog-One's picture

Oh no worries, I've got plenty more!

Wed, 06/26/2013 - 09:56 | 3694436 camaro68ss
camaro68ss's picture

Im thinking the pallet of .223 is worth more then a few house now.

Wed, 06/26/2013 - 11:07 | 3694889 MachoMan
MachoMan's picture

popping up all over for $.40 - $.60/rd...  xm855 being at the top end of things.

Wed, 06/26/2013 - 09:53 | 3694417 ParkAveFlasher
ParkAveFlasher's picture

The key thing about a house is, you can always just live in it.

Wed, 06/26/2013 - 10:00 | 3694446 Charles Nelson ...
Charles Nelson Reilly's picture

very true, but-

 

CONS

live in a city where you dont want to be when shit hits the fan

raped on taxes

no garden

1500 sq ft house with one kid and another one on the way

shitty schools run by PC retards

 

PROS

There is a bar on the corner of my block

Wed, 06/26/2013 - 10:18 | 3694477 ParkAveFlasher
ParkAveFlasher's picture

Location, location, location!  </s>

...

JK, you described everywhere.  Add a bunch of brass-headed orange-skinned harpies careening around town in SUVs with their feral children in tow, and, eh, Voila! suburban America.

Say, look at our holiday lights, they are way more beautiful than yours.  I am wealthy and holy.  Look at my car.  It's the size of a dumpster, because I am so gotdamn important to society.  Look at my house.  The interior is designed with all the attention of the monkey house at the zoo.  I'm installing a trolley simply to shuttle my miniature dogs to the dining room, because I have such a good heart.  There are screens on every wall so that I am better enabled to enter someone else's fantasies.  My own I can not speak to, my mortgage doesn't allow for it.

 

 

Wed, 06/26/2013 - 10:11 | 3694487 Dingleberry
Dingleberry's picture

Sounds like you live in a democratic oasis, like say Detroit.

Wed, 06/26/2013 - 09:56 | 3694431 HelluvaEngineer
HelluvaEngineer's picture

Unfortunate timing that, and right as the asshole investor who owns the property behind me was about to clear-cut it.  Dang, hard workin' 'Muricans just can't catch a break.

Wed, 06/26/2013 - 10:00 | 3694450 NoDebt
NoDebt's picture

I got Mom's estate house going up tomorrow.  Got it up in time for the "school district" shoppers, but not the run-up in rates.  Missed my window.  Story of my life.  I feel your pain, obviously.

Wed, 06/26/2013 - 10:01 | 3694458 BandGap
BandGap's picture

Both me and my new wife sold our houses in the past 6 months. Even with the lowere rates it was a fucking nightmare. We are combining the equities and building now, again, just ahead of butthole's comments about tapering.

Wed, 06/26/2013 - 09:53 | 3694418 Seasmoke
Seasmoke's picture

they cant even bring future sales forward any more  

 

Wed, 06/26/2013 - 09:56 | 3694433 Croesus
Croesus's picture

@ Seasmoke:

The funny thing is, they're still trying to build MOAR around here (central PA)....I don't know where they think the buyers will be coming from...but then again, they're probably falling for the NAR propaganda.

 

Wed, 06/26/2013 - 10:11 | 3694491 Dingleberry
Dingleberry's picture

Build it and they will come.

 

Or so I am told.

Wed, 06/26/2013 - 10:42 | 3694708 ejmoosa
ejmoosa's picture

Those responsible for future sales have not even been born yet.  And with the debt they already owe, they'll be looking for trailers and tents.

Wed, 06/26/2013 - 09:54 | 3694422 Stuart
Stuart's picture

BOOM! aaannd totally predictable.  Get your gold while you can, this tapering talk is 100% BS!

Wed, 06/26/2013 - 09:56 | 3694435 yogibear
yogibear's picture

Absolutely! They can't tapper. They are the market.

Their balance sheet is a lot larger then they advertise.

Wed, 06/26/2013 - 09:54 | 3694426 ceilidh_trail
ceilidh_trail's picture

Driving around SE Tennesse, I do not see much building at all. A few commercial projects in the tourist zone, but very little housing. LOTS of vacancy in the hotels as well. Some houses being built in the greater Cincinnati area, but not anything to get excited about.

Wed, 06/26/2013 - 09:55 | 3694429 yogibear
yogibear's picture

Americans will get used to it. Get the animal instinct going and tout housing shortages on the Obama media. The herd effect.

Then offer 50 or 75 year mortgages.

Wed, 06/26/2013 - 09:55 | 3694430 salimmk
salimmk's picture

don't worry there's lots of cool new apps on the app store!

Wed, 06/26/2013 - 09:57 | 3694440 PaperBear
PaperBear's picture

Why is netdania showing a drop off in volume for silver trades since 13.45 whereas it is showing no drop off in volume for gold trades ?

Wed, 06/26/2013 - 10:00 | 3694454 MilwaukeeMark
MilwaukeeMark's picture

Since the whole damn economy is based on so much government interferrence, this is like the wobbly kitchen table I tried to level once. I trimmed one leg and that made the table wobble another way, so I trimmed another leg it wobbled yet a new way. You do that long enough, you've got no table left to eat on.

Wed, 06/26/2013 - 12:33 | 3695457 Nobody For President
Nobody For President's picture

Gave that up long ago - don't trim the long leg(s): shim the short one(s).

Wed, 06/26/2013 - 16:03 | 3696566 Clycntct
Clycntct's picture

Whada ya talking aoubt? Buy a new house. Problem solved.

Wed, 06/26/2013 - 10:05 | 3694467 Smegley Wanxalot
Smegley Wanxalot's picture

the only thing in the world that matters is the wealth effect, and when it comes to debt we are truly a wealthy nation

Wed, 06/26/2013 - 10:05 | 3694469 RunningMan
RunningMan's picture

You were lucky to live in a house. I used to live in one room, half the floor was missing, and we were all huddled in one corner for fear of falling.

Wed, 06/26/2013 - 10:08 | 3694480 FieldingMellish
FieldingMellish's picture

Lumber is the new canary.

Wed, 06/26/2013 - 10:14 | 3694505 ebworthen
ebworthen's picture

Headlines!

DOW up 100+!

Supine Court passing down decisions about a Constitutuion that the other branches of government have already abandoned.

Dogs of the DOW?  Dogs on surfboards!

Sales of million+ dollar homes doing great so the housing recovery is here!

Barbarous relics being bashed by banker barbels!

GDP sucks, but the markets are up!

Wed, 06/26/2013 - 10:22 | 3694549 CheapBastard
CheapBastard's picture

Fewer and Fewer people want a house as more and more people wise up to the huge costs of home ownership.

Wed, 06/26/2013 - 11:44 | 3695134 Cookie
Cookie's picture

Its been 10 happy years since I shed that yolk

 

Thu, 06/27/2013 - 04:28 | 3698356 Droel
Droel's picture

I want a house, bad.  My family has always had a house, I left home into my own house at 25yo, lost house after 10 very happy years.  Bad luck and I (and my family) have ben living in a rented country house with country fields and country toilets, and contry air/conitioning.  we live in the doombocks.  We want to buy so bad (I know it's at the peak of the market and the absolute worst time ever to buy a house, but I have to do it make the family happy.  The cash we have should be able to buy just about any real estate on the market (Except for the over1mil price or comerciAL market.

I am having one hell of a problem landing the right contracts.  Always multiple bids.,  Put a bid on a house last week $750000.  They had it marked 900000 but it had been sitting 3+ years with no offers, even as they kept bringing down the asking price of the house.  The realtor said put in any offer casuse she hasnt had any offers.  I maxed what I could afford but it would be alittle lower that the asking price.  The realtor knew is said to try, so we did.  
Come to find out 4 offer offers magically presented (the same day after 3+ years.  Needless to say mine was the low price but no contingencies, they accepeted the highest price with contingent to sell their house.  My thoughts, bird in a hand is worth 2 in a bush.  This has happened to me 3 times recently trying to buy a house and two more that was sold on the first day of listing and another on the second day of listing that I didn't get to see.   

The housing market is up big time in my area (suburb of buffalo)  pleaple are paying way over asking price (I wonder if the all conscious realtors explained to the people that since they just paid 30% over assessment that their tax bill will be a lovely 30% higher.  My realtor lied to me, said it was already assessed (it was a builders model home for 3 years) and that it might go up a little and I wasn't happy I could just fight it.  I called the assesors office and gave me similar story, that they wouldn't reassess unless it was an area that a lot unusual sales actiity and they would reassess the whole area.  I learned that first hand thanks to my lawyer, at one time I did have a contract signed for a house that had taxes at about 16k,  It was doable but I would working hard for tha house.  It turns out that the town automatically changes your assessment when you purchase it(though it may take a year or two to catch up)  My taxes would habe been about 22k a year.  I was having a hard enough time with 16k but the 22k a year taxes put me over the edge and my lawyer disapproved.  I owe him one.  Residential construction is not the only thing up around here, lots of commecial builiding going on as well.  Also, lots and lots of fancy cars like Bentley, Ferrari, Mercedede, Porsche.  Previously we rarerly saw these.  The only fancy car i ever saw before the year was Lambo someim in the 80's.  It was an anomly.  

Wed, 06/26/2013 - 11:22 | 3694972 Meremortal
Meremortal's picture

Wait, it's not the price of manipulated mortgage paper that matters, it's the demand for physical real estate!

Or something....

Wed, 06/26/2013 - 11:27 | 3695015 CoolBeans
CoolBeans's picture

Starving the system....

Hey Crash Burnancke:  "Winning!" 

Wed, 06/26/2013 - 12:12 | 3695343 Caveman93
Caveman93's picture

iHome

Wed, 06/26/2013 - 12:20 | 3695379 Dareconomics
Dareconomics's picture

The headline is very misleading.  Housing prices rose in April, but mortgage rate and application information is from June.  A more appropriate headline would read, "Rising Mortgage Rates Have Yet to Affect Housing Market." But, they will.  Note our chat above.  Houses are quickly becoming unaffordable at today's increasing rates. 

Full post with charts, images and links:

http://dareconomics.wordpress.com/2013/06/26/around-the-globe-06-26-2013/

Wed, 06/26/2013 - 12:49 | 3695543 Dre4dwolf
Dre4dwolf's picture

Because rates went up like .25%, the debt isn't worth it.

Wed, 06/26/2013 - 12:50 | 3695549 Caveman93
Caveman93's picture

But we haz "golden coins" from guberment mint for salez! They need to try like this, then success!

Step1 Steal underpants

Step2...

Step3 Make Profit

http://i1348.photobucket.com/albums/p736/jtraeger93/img014_zps8b7245c1.j...

Wed, 06/26/2013 - 12:54 | 3695570 besnook
besnook's picture

so the new reality is mortgage rates go up when business gets worse? who needs lsd when we have the fed.

Wed, 06/26/2013 - 13:41 | 3695869 Cheeseus Sonofdog
Cheeseus Sonofdog's picture

ZeroHedge lost some of my respect on this article. Mortgage applications to PURCHASE were actually up 2% over the last week and up 16% year over year. I am bearish on real estate, but we don't need Zerohedge to become Yahoo propaganda. Just give us the facts.

Wed, 06/26/2013 - 21:27 | 3697535 Shooting Shark
Shooting Shark's picture

Heck, I've been looking at buying.  I live overseas, but would like to own negative dollars for the great inflation.  Worst comes to worst, I "own" a house to retreat to and the dollars I owe get smaller and smaller.  SHTF plan is a separate consideration, so I don't need to encompass that in a land deal.

Thoughts?

Thu, 06/27/2013 - 00:09 | 3698024 StopIt.Now
StopIt.Now's picture

Did anyone mention the REIT's might have stopped buying as much?  That would account for the ENTIRE downturn.

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