October Mortgage Purchase Applications Collapse To Decade Lows

Tyler Durden's picture

Applications for mortgages for the purchase of a home plunged at nearly the fastest pace in 9 months this week, dropping to their lowest since the Christmas week 2012 - and lowest since February 2012. Now down over 20% from their May highs, the plunge is a problem - since as BofA's CEO noted earlier:

  • *MOYNIHAN SAYS HOME PURCHASES, NOT REFI, BOOST THE ECONOMY

So just another indicator that all is not well in the 'economy'.

 

What is perhaps most worrisome is that this is the lowest level of mortgage purchase activity for this time of year in a decade.

 

Chart: Bloomberg

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camaro68ss's picture

we dont need no water let the mother fucker burn!

redpill's picture

This could be related to the Fannie/Freddie treadmill stopping during the gov't shutdown.  Just sayin

gdogus erectus's picture

Everybody knows that you don't need a mortgage when you are paying cash, silly.

Or

Ohhhh, you thought we were holding rates down for you!

ghostfaceinvestah's picture

Fannie and Freddie originations were not affected by the shutdown - they are not government entities, they are private companites under conservatorship.

More likely the decline is due to all-cash buyers.  I believe ZH had an article a few weeks ago showing that all-cash transactions were half the market in August.

TruthInSunshine's picture

"There's Never NOT Been A Better Time To Buy A Home, EVER, Including The Present Time, Which Is Even MOAR Better-er"*

*Message sponsored by The National Association of Realtors, National Association of Homebuilders, National Association of Mortgage Brokers, National Association of Title Insurance Underwriters, National Association of Bankers, National Associations of Everyone With Their Hand In The Housing Pie Including All Unions, and last, but not least, Your Friendly Tax Assessor's Office.

Dr. Engali's picture

There has never been a better time to
punch a realtor in the face.

TruthInSunshine's picture

Realtors work hard & possess a highly technical skill set.

Realtor to prospective buyer: "And this is the kitchen pantry {opens pantry door}. You can store canned soup, boxes of cereal, and other items in here."

corporatewhore's picture

Most realtors I'm familiar with are excellent form fillers, closing the deal on their knees with a little organ music.

corporatewhore's picture

Most realtors I'm familiar with are excellent form fillers, closing the deal on their knees with a little organ music.

TruthInSunshine's picture

Realtor to prospective home buyer: "Did I mention my commission is 6% of the selling price & that this house is a steal at the full asking price? Trust me. This is my area of expertise, yo."

ghostfaceinvestah's picture

The most obvious sign that Realtors are overpaid for their services is the massive amount of lobbying money they spend in DC.  You don't spend that kind of coin to protect an essential service that is being provided at a fair price.

JailBank's picture

That is exactly what my realtor told me. No kidding since the house had just come on the market she told me that offering $10k below asking would be an insult and we should go right in at the full asking price to make a deal. I laughed and asked for the $10k. These people just run a scam. When/If I sell this house I am doing it on my own.

Navymugsy's picture

We were looking at rentals today and the agent showing us the home said that all realtors were idiots who couldn't do anything else for a living. For once I agreed with a realtor!

Oldballplayer's picture

Decade low?  The decade is two years old.  WTF?  Just a little hysterical.  I know the numbers are not good, but jeez...

Ness.'s picture

So... you wanna buy my house?  Great deal.  Market is RED HOT baby.  You snooze, you lose.  

Landrew's picture

IF you READ the article, you will find it states a DECADE low for THIS TIME OF YEAR! That isn't hysterical it's a  mathematical FACT. 

TheLooza's picture

meh, BTFH... Buy the Fucking House...

1223pm's picture

Let me see what will be my health insurance first.

LawsofPhysics's picture

Meh, does one still need a wage to get a mortgage?  (Apparently not with mark to fantasy accounting)

corporatewhore's picture

$8 an hour can do miracles these days

TruthInSunshine's picture

5% down (and 3% of that can be a "gift" from a parent/relative) and ability to fog a mirror, and IT'S YOURS!

Banks offering mortgages with only 5% down payments

By Les Christie  @CNNMoney November 5, 2013: 11:30 AM ET

http://money.cnn.com/2013/11/05/real_estate/down-payment-mortgages/index...

azzhatter's picture

$8 per hour part time plus $25 per hour in Odickhead subsidies and you're golden. Buy buy buy

ziggy59's picture

Ben and Janet will have our backs..

Bosch's picture

Bullish.  Just a momentary pause until all those burger flippin' mouth breathin' 0bama voters move out of mommy & stepdad's house and start buying fixer uppers.  

NEOSERF's picture

Wonder if Moynihan is vested in continuing QE....

1835jackson's picture

Potential Customer: How has business been? I hear that home prices are going up. Perhaps I should sell?

Realtor: Business has been very, very busy. You SHOULD sell! 

Me: I need a fucking drink.

Blankenstein's picture

Until the housing market stops being a get-rich-quick ponzi filled with specuvestors driving prices above fundamental levels, this will continue to occur.

 

therevolutionwas's picture

Yes, in otherwords, until the gov't and their crony banks get out of it.

analyzer_66's picture

When homes are priced back to 1980s prices the real estate market might become more lively. Real estate agents are so crooked they have to screwed into the ground like a corkscrew when they die.

Wicked Old People's picture

I wonder what will happen when everybody who's qualified to buy has bought and they start wanting to sell for any reason and then . . . omg 2007 redux . . . let's just lower the standards for qualifiying! It worked before; tens of millions of new debt slaves and we got bailed out! Hell, let's just do the whole thing all over again! Killer! 

Headbanger's picture

Your theory requires the concept of there still being Yuppies willing to become debt slaves for the sake of their ever expanding egotism!

Not gonna happen with the Millennials so deeply entrenched in Mom & Dad's basement or barn and not even wanting to buy a car now!.

Welcome to the New Normal of much much lower expectations.

WhiteWolf's picture

All recoveries require nowadays is free Fed money supplied to hard refining banking personnel. Those trying to finance hard equipment assets to small business will attest THERE NEVER WAS A F.  NG. RECOVERY

Dr. Engali's picture

It's a good thing that congress just passed a bill allowing the banks to go back to playing derivative roulette game. The housing market will re-inflate in no time. And no need to worry, because it's different this time.

disabledvet's picture

"We avoided the deflation by creating the biggest one ever!" Why am I long euro again? Go long independent Texas and start and start buying their currency? At least I'll know where to go to fill up my gas tank. I'm done calling equity tops but I would laugh if the thirty year suddenly headed to 1 percent here. I find myself fatally attracted to the the incongruity of it all.

Keyser's picture

Kind of hard to qualify for a mortgage when your full time job just got cut to 29.5 hours per week and your healthcare costs tripled... Just sayin'... 

 

duo's picture

there's a government subsidy for that.

syntaxterror's picture

Who needs a mortgage when you're paying all ca$h? In other words, when you're laundering money, why bother with a mortgage?

onewayticket2's picture

these houses are being paid for 1000 at a time - for "cash"

disabledvet's picture

Homesteading is still legal in Alaska. They say moose burgers get old after a while though.

mophead's picture

when you're laundering money, why bother with a mortgage?

Every now and then someone brings up the notion that cash purchases are being made from laundered money. A cash purchase simply means there's no mortgage. Urban myth #1548: drug lords and crooks walk into escrow offices everyday with cash-filled briefcases to purchase homes and everyone looks the other way!

Other silly urban myths found on this forum:

- The rich pay little-to-no taxes! Make them pay their fair share!

- The rich get lots of write offs, up to 100%! Eg., sales = 100K; payroll/expenses = 100K; Total net income before taxes = $0; Payroll/expenses = 100% write off, therefore business owner paid no taxes! How unfair!!!!

- Real estate is an asset class that always appreciates in value, yet the IRS allows it to be depreciated! What a loop hole!

caShOnlY's picture

 

 

 

Economy

E con o my

E con o me

E con of me

con of me

The con of me.  The great american conofme.

 

corporatewhore's picture

here's an example of real estate buying by complete idiots.

I was following a foreclosed home on zillow and the home was projected to sell for $130,000.  It gets listed at almost 200k and gets an offer almost immediately.  Then rejected.  Within 24 hours another offer.  Real estate agent (affectionately known as a whore) slapping backs and high fives.  It was listed six months ago prior to foreclosure at $150,000 and still couldn't sell.

I guess buyers just don't read or do any investigation.  This fool just ate $50,000.

Almost Solvent's picture

That is sad but true for many homeowners who can't wrap their minds over this simple truth -

YOUR HOUSE IS WORTH WHAT SOMEONE ELSE WILL PAY FOR IT (i.e. "the market" which may be unicorn shitting skittles depending on where you live)- not what your whore realtor says or what you need to get out of it.

 

carlin401's picture

location, location, location,

zillow don't mean shit,

$$$ talks and bullshit walks,

that is all you need to know

lastly, for young guys

buy all the rental homes you can for a 15 year fixed, when your
25, that way your paid off at 40 years old and retired
set for life, ...

Kirk2NCC1701's picture

Why purchase, when you can confiscate?

http://rt.com/news/israel-palestinian-homes-demolish-323/

I see Muslims going "ballistic" if someone insults their faith or its founder, and I see Jews doing the same.  The consequences are either life-ending or career-ending.  For these reasons, NO one dares to fuck with them.  What about Catholics, what about Christians?  Nope, they're fair game, it seems.  No outrage on their part.  Not a fucking peep.  Even when their priest get beheaded.

Do Catholics or other Christians have their own "ADL", their own "AIPAC" --> ACPAC?  Or have all people of honor and decency been bought, bullied and compromised into servitude? 

Anyone, anyone?  [crickets]

NOTaREALmerican's picture

Re:  Anyone, anyone? 

The reason the Christian West is livable for non semi-psychotic imaginary-friend believers is that the Christian West - at some point in history - realised their immaginary-friend was just their own brain's bullshit machine talking.  

So, the down side is the remaining Christians with the chattering immaginary-friend don't have the power to behead anybody.   They'd like too, but - well - they can't.