Mortgage Applications Collapse To New 13-Year Low

Tyler Durden's picture


Despite yesterday's exuberant spike in optimism from the NAHB sentiment index to 8 year highs, the delusion from reality appears to growing ever wider. This morning's "if we build them, they will buy'em" false headline spike in housing starts (seasonally-adjusted) is yet another delusional divergence as the mortgage applications index collapses (down 60% from 2013 highs) to a new 13-year low.

New 13-year lows in mortgage applications...


but, hey, seasonally-adjusted we'll just keep building...


Charts: Bloomberg

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Wed, 12/18/2013 - 12:11 | 4257270 Everybodys All ...
Everybodys All American's picture

The hollowing out of the American middle class continues unabated. Who will finally put an end to this? I know of no one in the current leadership who will.

Wed, 12/18/2013 - 12:14 | 4257281 catacl1sm
catacl1sm's picture

This bodes well.

Wed, 12/18/2013 - 12:17 | 4257285 Cult_of_Reason
Cult_of_Reason's picture

Current leadership is change you can believe in.

Hitler promised change you can believe in too.

Wed, 12/18/2013 - 12:30 | 4257345 MR166
MR166's picture

Funny you should bring that up.  Hitler was a Socialist too.   The Nazi party was Socialist!!!

Does anyone find it  interesting that this is NEVER mentioned by the progressive media.

Wed, 12/18/2013 - 12:33 | 4257354 Pladizow
Pladizow's picture

NAR all cash buyers dont need no stinking mortgage application!

Wed, 12/18/2013 - 12:40 | 4257387 Cult_of_Reason
Cult_of_Reason's picture

Hitler's Gestapo = Obama’s NSA Gestapo

National Socialist German Workers' Party
or Parteiadler der Nationalsozialistische Deutsche Arbeiterpartei
or Nazi Party

Wed, 12/18/2013 - 13:30 | 4257595 NIHILIST CIPHER

Speaking of Nazis, for those of you who have netflix or just source on the internet the documentary "DARK LEGACY". At the half way point your mind will be changed forever who runs this country. Please do yourself a favor and watch this film before you make the mistake of believing the lie another day. My research four decades ago turned up same info.

Wed, 12/18/2013 - 13:57 | 4257684 Popo
Popo's picture

Oh wow.  That second chart up there just screams "shit storm".   This is going to end EXTREMELY badly.   It's clear that once again (amazingly), "nobody sees it coming".    


Wed, 12/18/2013 - 12:51 | 4257441 MR166
MR166's picture

To blame this mess on the NAR is very short sighted.   They do not set the prices, the government funded buyers do.   That is like saying that your stockbroker sets the price of the market.

Wed, 12/18/2013 - 13:26 | 4257578 Popo
Popo's picture

The NAR does however provide forward guidance.  And they do an enormous amount of economic reporting.  ALL of which is grotesquely biased and dangerous.   David Lereah quietly side-stepped off the scene after he had personally caused billions in aggregate damage to suckered Americans.    So the NAR does indeed share a large portion of the blame.

Wed, 12/18/2013 - 14:00 | 4257695 Blankenstein
Blankenstein's picture

Want to bet they don't set prices?  The local realtards tell the sellers what the asking price should be based on "the comps" while entirely ignoring the economy, likelihood of higher taxes based on rising debts of local, state and national governments, etc.  Next they tell the buyers to lower their expectations and offer close to the asking price as to not offend the sellers.  They are a bunch of price fixers.  And did you see how they treated the FSBO sellers?  Many tried to shut out this competition.  They should change their name to the National Association of Racketeers.  And they DID play a large part in the housing bubble run-up by pushing the "housing never goes down" meme and telling the buyers 15 percent price increases are "in the bag" among many other things.  Think they don't have influence?  They have spent 100 MILLION dollars since 1999 on lobbying.  If you want to spread NAR propaganda take it over to Activerain.

Wed, 12/18/2013 - 14:43 | 4257871 MR166
MR166's picture

I have news for you it is the listing Real estate agents JOB to represent the seller and get him the highest price.  It is the selling agents job to represent the buyer and get him the lowest price.  THAT is the definition of a market.  If you are unhappy with that arrangement perhaps you should continue to rent.

Wed, 12/18/2013 - 13:11 | 4257520 yrad
yrad's picture

Next stop, ghost cities on the Eastern Seaboard. China should be proud of us...

Wed, 12/18/2013 - 13:04 | 4257504 Clark Bent
Clark Bent's picture

Wanna really rub it in? Make sure to mention that socialist Germany made a pact with socialist Russia in 1939. Then together these brave modernist utopias worked out the violent and unprovoked invasions and division of Poland, Estonia, Latvia, and Finland. They promised to work toegher on other issues, like France and England. But whoops, Germany beat France far faster than expected, making the Russian sopcialists very nervous because it upset their plans to stab Germany in the back while it was preoccupied with France. Imagine the egg on socialist progressive Molotov's face when their former co-conqueror invaded mother Russia in 1941. 

The socialist progressive Germans then made it very uncomfortable for Stalin with his new British and Ameircan allies by uncovering in 1942 the mass graves of tens of thousands of innocent Polish officers executed abd buried in mass graves in Katyn, in Russia's socialist half of the new Poland. See the Poles were in Britain trying to fight the Nazis when this little problem came up. Those kooky progressives, they all behave the same. Over and over again. Must be something to do with their malevolent and insane psychopathology that defines mass murder as progress. Fo-ward!

Wed, 12/18/2013 - 14:06 | 4257722 Landrew
Landrew's picture

The word NATIONALIST precedes and has the most meaning. Do more homework.

Wed, 12/18/2013 - 14:25 | 4257807 FL_Conservative
FL_Conservative's picture

Ask ANY revisionary, progressive historian and they will tell you that Hitler was a "right-wing wacko".  But don't confuse them with the FACTS.  They're incapable of dealing with it.

Wed, 12/18/2013 - 12:19 | 4257307 DavidC
DavidC's picture

No Taper! Yay!


(sarc off)

Wed, 12/18/2013 - 12:31 | 4257346 Cult_of_Reason
Cult_of_Reason's picture

No taper is good! It means more free money to the uber wealthy from the Fed and more ♥YELLEN Ferrari and Bentley license plates.

Taper is good, it means the economy is strong.

Buy stocks no matter what for the long term!


Wed, 12/18/2013 - 12:32 | 4257361 kaiserhoff
kaiserhoff's picture

Why does this whole BenYellen thang remind me of lemmings?

Wed, 12/18/2013 - 14:04 | 4257707 Spungo
Spungo's picture

Stansberry said he named his helicopter the "Benicopter" after helicopter Ben. I think he also said he plans to name his boat Yellen.

Wed, 12/18/2013 - 13:14 | 4257535 RSloane
RSloane's picture

....and we made fun of China for building cities no one was living in. Who is taking a page from whose book here?

Wed, 12/18/2013 - 12:36 | 4257350 tarsubil
tarsubil's picture

It is all fantasy land. I spoke with a fantasy lander last night. He's just got to keep his house to get that equity back. Hard to get through to people living in lala land.

Wed, 12/18/2013 - 12:59 | 4257478 ZH Snob
ZH Snob's picture

investment bankers don't apply for mortgages; they pay cash, our cash.  that's how they steal our houses.

Wed, 12/18/2013 - 12:14 | 4257272 Dolus
Dolus's picture

I mean why doesn't the Federal Reserve do something about this like buy the mortgages from the banks so they don't have any risk. We can't let home prices go down. 

Wed, 12/18/2013 - 12:22 | 4257312 101 years and c...
101 years and counting's picture

well, ben can spur housing by letting rates drop.  and the only way to do that is to significantly cut QE.

Wed, 12/18/2013 - 12:21 | 4257316 max2205
max2205's picture

Economics isn't a true science and the markets just vector off every the ball

Wed, 12/18/2013 - 12:26 | 4257336 Bangin7GramRocks
Bangin7GramRocks's picture

Middle class wages are at 1990 levels, but house prices are at all-time highs. They will never let the housing market reach its natural price. The Fed will buy mortgages if thats what it takes to keep the housing market artificially inflated. No Diggity, No Doubt! 

Wed, 12/18/2013 - 12:40 | 4257400 doctor10
doctor10's picture

they have to keep housing propped up-that keeps local tax revenues from property taxes up. They let housing drop to 1990 prices, property tax revenues plummet and the bottom drops out of the muni-bond market

Wed, 12/18/2013 - 13:25 | 4257569 A Nanny Moose
A Nanny Moose's picture

...which decimates pensions.

Unfortunately, that which cannot continue, will not continue.

Wed, 12/18/2013 - 13:11 | 4257519 Clark Bent
Clark Bent's picture

They are bulldozing them in Cleveland to keep the stock low. A perfect example of the broken window theory utilized by that former preogressive titanic failure Franklin Roosevelt who criminally prosecuted producers for lowering prices, and slaughtered millions of animals and burned crops to keep the prices high to save us from the Depression. Back then, we had nothing to fear but fear itself (plus insanely stupid government fantasists with a binary comprehension of reality). Just like today. Rock the vote! 

Wed, 12/18/2013 - 14:10 | 4257740 Spungo
Spungo's picture

But affordable housing would make America's middle class too strong. We can't destroy the middle class until we create a society of renters. We need to get back to the master/serf model that Russia enjoyed before 1917.

Wed, 12/18/2013 - 12:39 | 4257376 wagthetails
wagthetails's picture

although a good point, i say we stop beating around the bush here and just let the fed start buying new homes.  or better yet, the fed buys the house, with a FNM mortgage, and then lets the google robots and amzn drones live in the new houses. 

Wed, 12/18/2013 - 13:12 | 4257526 Clark Bent
Clark Bent's picture

Sounds like you got yerself a sitcom there. How do we introduce some amiable homosexuals into the mix? 

Wed, 12/18/2013 - 13:11 | 4257528 novictim
novictim's picture

The problem starts with gambling and speculation in what has traditionally been a very dull and predictable -family- asset: the single family home.

The solution should involve eliminating the ability of speculators to enter into the housing market in the first place.  The bedrock of home ownership and dependable value is now no more secure than any other asset.  Hence, we see people treating their home as a piggy-bank and then walking away from their spent home equity loans or people buying homes way over their heads in the hopes of "flipping" them for a profit.

When these speculative bubbles collapses, then the Fed rushes in to save the Too Big To Fail banks who gave massive bonuses to one another for having earned huge fees on these speculative and overleveraged transactions.



How you accomplish eliminating speculation and gambling from the housing market and returning it to the prior paradigm has many avenues of approach.  But it does not start with QE1, QE2, or QE3.

Wed, 12/18/2013 - 20:56 | 4259258 bilejones
bilejones's picture

"The problem starts with gambling and speculation in what has traditionally been a very dull and predictable -family- asset: the single family home."


And right there's the problem, the family home is really a consumer durable rather than an asset.

Wed, 12/18/2013 - 12:12 | 4257273 nasdaq99
nasdaq99's picture

this is reflecting the falloff in refis.  two buddies of mine in the mortgage biz say that buyers have moved up.

Wed, 12/18/2013 - 12:59 | 4257475 kito
kito's picture

You are likely right. Not sure why Tyler doesn't break down the percentages of refi/original mortgages. Perhaps we can't admit that housing is better than we want to admit

Wed, 12/18/2013 - 12:14 | 4257275 Reference Variable
Reference Variable's picture

Channel stuffing to stave layoffs, but... it's coming.

Wed, 12/18/2013 - 12:15 | 4257277 Cookie
Cookie's picture


Wed, 12/18/2013 - 12:20 | 4257310 Bay of Pigs
Bay of Pigs's picture

I know, worse news.

Up, up, up.....BULLISH!

Wed, 12/18/2013 - 12:15 | 4257286 CrashisOptimistic
CrashisOptimistic's picture

Buyers aren't using mortgages because buyers aren't families anymore.

It's all bullshit.

Fast forward, btw, a decade or so when this new American renter class tries to retire and pay food AND rent with their $15,000/year Soc Sec check.  At least now they own their house outright by then.  Come the future, they won't.

Wed, 12/18/2013 - 12:33 | 4257364 NoDebt
NoDebt's picture

Best comment of the thread (at least so far).

Wed, 12/18/2013 - 13:39 | 4257626 MachoMan
MachoMan's picture

Isn't that what medicaid, et al, are for???  Won't we just expand the traditional nursing home/retirement community to fit?

Wed, 12/18/2013 - 17:08 | 4258649 Nick Jihad
Nick Jihad's picture

By all means, buy a house as a "family". Your future ex-wife will enjoy the valuable asset that you provided for her, and you will enjoy sweating the rent for a vermin-infested apartment, after child support has been garnished from your paycheck.

Wed, 12/18/2013 - 12:19 | 4257288 EmmittFitzhume
EmmittFitzhume's picture

You will see brand new and half built, never lived in houses decaying in the elements. What a waste of resources.  This is liberalism at it's best, err worst

Wed, 12/18/2013 - 12:43 | 4257410 Bunga Bunga
Bunga Bunga's picture

Yes, we can Chinese.

Wed, 12/18/2013 - 13:14 | 4257532 Clark Bent
Clark Bent's picture

Same diff. 

Wed, 12/18/2013 - 12:16 | 4257292 Murf_DaSurf
Murf_DaSurf's picture




Yikes! Look at that divegence!

Wed, 12/18/2013 - 12:17 | 4257294 Jay
Jay's picture

I thought most new buyers were cash buyers.

Wed, 12/18/2013 - 12:22 | 4257301 LawsofPhysics
LawsofPhysics's picture

In order to have a mortgage, one must have a wage, or a pile of cash, period.

In fact, in order for one to pay rent, they must have an income, that isn't being spent on living expenses, period.

Those with the cash now looking to build more housing and profit from the wageless masses...

good luck with that...

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