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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SheepDog-One's picture

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

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

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?!?"

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)           

Doubleguns's picture

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

WayBehind's picture

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

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 !

slaughterer's picture

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

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.

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.

Spigot's picture

pump monkeys one and all

imapopulistnow's picture

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

syntaxterror's picture

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

Spigot's picture

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

CH1's picture

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

Stoploss's picture

Fortunately, higher rates will help this..

 

No??

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.

Headbanger's picture

Are you crazy!? Don't you dare!

SheepDog-One's picture

Oh no worries, I've got plenty more!

camaro68ss's picture

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

MachoMan's picture

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

ParkAveFlasher's picture

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

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

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.

 

 

Dingleberry's picture

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

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.

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.

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.

Seasmoke's picture

they cant even bring future sales forward any more  

 

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.

 

Dingleberry's picture

Build it and they will come.

 

Or so I am told.

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.

Stuart's picture

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

yogibear's picture

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

Their balance sheet is a lot larger then they advertise.

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.

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.

salimmk's picture

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

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 ?

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.

Nobody For President's picture

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

Clycntct's picture

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

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

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.

FieldingMellish's picture

Lumber is the new canary.

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!

CheapBastard's picture

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

Cookie's picture

Its been 10 happy years since I shed that yolk

 

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.  

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....