Mortgage Applications Down 66% From Highs To New 13-Year Low

Tyler Durden's picture

From its peak in October 2012, mortgage applications have collapsed 66% and this week printed at new 13-year lows. Since rates started to crack on Taper talk in May 2013, mortgage applications have fallen in a one-way street (but hey, rising rates won't affect the housing recovery, right? remember 15% mortgages... as the usual bullshit meme goes, entirely missing the shift in house prices, affordability, and marginal price-setter). Of course, the usual 'seasonal' effect wil be blamed and recovery will re-blossom in the new year... except, seasonally this is among the worse drop in the last few weeks of the year in the last decade. Adding further salt to the wound of wealth generation, the refi index has dropped to a fresh 5-year low as the home equity ATM remains shut (having dropped 73% in the last few months).


New 13-year low in mortgage applications...


and no - its not seasonals, its worse...


But hey, the Fed's economic-confidence inspiring Taper will fix all this and housing will rise once again... on the shoulders of cheap money Wall Street landlords...


Charts: Bloomberg

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101 years and counting's picture

the fed can fix this.  untaper so rates go over 5%.....oh wait.  thats bad. 

well, the fed could taper more and crash stocks....sending money into bonds and dropping rates.  but the wealth effect would be dead.  oops.  sounds like monkeys at marriners eccles building have put themselves in a corner.

PR Guy's picture



While we are waiting for normality to return, here's a funny animation of a conversation that actually took place between two women (and inspired the animation):



Stoploss's picture



Oracle 911's picture

I think place where the normality has somewhat returned is Detroit.

disabledvet's picture

the interest rate on the ten year should growth plus inflation. it did not surprise me at all that "growth" suddenly appeared at the 3.6% rate. that would "mean" rates are fine where they are. once growth heads back to below two percent then so will the rate on the ten year. given all the leverage actually those rates might "overshoot" dramatically actually.

yrad's picture

Welcome to my world...

But hey, at least I can count on all those new first time home buying college grads and their high-paying tech jobs with no student loans or maxed out MasterCards to turn this market around...

Oh wait..

midtowng's picture

Let's see: no mortgage apps. Home prices vs. income at record highs. + Fed tapering.

Yeh, that sounds like a housing boom to me.

Bearwagon's picture

Don't you worry, Wall Streets Acid-Queen (Yellen) has guaranteed to break that young little heart, errm, market ...

Pig Circus's picture

ObamaCare is the new mortgage payment.

Quinvarius's picture

Just wait until the rates start to reset higher like an ARM every year.

tarsubil's picture

Haha! Yeah. Then no little people will buy any rights to property even if limited. All the big Mr. Potters will pay cash and rent these slums out to the little people. Then the rentals will implode and the trillions of misvalued derivatives will blow up and more free cash for the Mr. Potters. Where's George Bailey when you need him? Apparently, he went ahead and killed himself in our alternative timeline.

dobermangang's picture

Except you don't get a house.  Just like student loan payments... a mortgage payment without the house.

Hope and Change turned out to be Debt and Chains.

NoDebt's picture

Yeah, but you'll have healthcare- healthcare just good enough to keep you working.  As soon as you can't, they'll death-panel your ass.

Old Eskimoes wandering out on ice flows seems not so uncivilized in comparison.

dobermangang's picture

Nah, you'll have health insurance, but not a lot of healthcare(if you can afford it).  The masses would have lots of trouble paying those incredibly high deductibles to keep on seeing a doctor.

JustObserving's picture

Mortgage applications down 66% while TWTR up 69% since Nov 25.  So it all balances out. 

People are too wealthy to need mortgages.

Free Money and a Merry Christmas from the Fed

NoDebt's picture

In a generation nobody will even know what the word mortgage means.  "Mortgage?  Is that the same as a rent payment?"

GeezerGeek's picture

 When all one can afford is a $49 house in Detroit the need for a mortgage goes away. The local loan shark can handle that.

Ban KKiller's picture

Folks don't have jobs they can rely on so they won't apply for loans. People now know that the big banks are continuing criminal enterprises and they do not trust the banks. So, no trust in the banking cartel of criminal assholes. 

Now...those with mortgages should grow a pair of nuts and try and  to get their debt validated. Who really owns your Note? I dare you to try and find out with an answer that is legal and lawful in your state. Look at the Uniform Commercial Code for your state...who has the right to enforce a Note? Not the scumbag "servicer" that is for sure. Fuck up the banks...don't pay a debt that can not be validated under the laws of your state. If you think a letter saying "trust us, we own your note " is sufficient then please send me your mortgage payment. I own your Note. 

Meanwhile, be subversive, grow some food. 

100 years of the FED and we have what? Fiat rules!

corporatewhore's picture

Ban... Your comments are spot on and a sad commentary on what we've become.  I've lived through this shit since 2008 and the judge in my non judicial foreclosure state is a beholden tool to the banks and the servicing agents who couldn't prove they owned anything.

Jobs are gone. Benefits gone. Mutual respect between management and labor in the toilet.  It's now just seeing who gets fucked first.

Me...i gave up on christmas and meaningfulness in life in 2008.  Bring it on.

Handful of Dust's picture

Take some time and walk into a builders sales office. It's a real education to watch these folks [who think they have 'good jobs'] sign onto 30-years of $560,000+ debt.

They become trapped into that job with a lead weight around their ankles......add that to the massive immigration flooding the country and wages will stagnant for years to come crushing many dreams of moving up the ladder or a salary increase. As Buffet said, "it's going to be long, slow and rough."

Papasmurf's picture

This is healthy market feedback.  Don't try to tweak it.

starman's picture

who needs loans,  in America people buy houses , cars and student loans with cash! with the  highest wages in the world we  save our paychecks and get 0.5% return from our ftiendly naighboorhood bank to have planty savings to retire on............sarc

JiminGA's picture

42% of November's existing home sales were paid in cash by investors, as America returns to being a renter nation as it was before WWII.  Renters don't improve their homes or buy furniture and this trend will further erode our consumer based "economy".

itstippy's picture

These so-called "cash buyers" are leveraging their purchases somehow, just not through traditional mortgage banking channels.  You can bet your boots that Blackrock et al aren't pulling the full purchase price of the homes they're buying from some giant pool of "cash reserves". 

Money never sleeps.  The multi-trillion dollar "excess reserves" held at the Federal Reserve by member banks have been hypothicated, rehypothicated, and re-rehypothicated too; just not via traditional banking channels.  Ask Jon Corzine how this shit works. 

pitz's picture

Someone selling their existing paid-off house and buying a new one is considered to be a 'cash' buyer.  Also houses mortgaged after the purchase transaction closes, of course, as you point out, are considered 'cash' purchases.  Dealing in 'cash' up-front is often operationally easier than submitting an offer "pending financing approval" for everyone involved. 

Also, there are new "rental backed securities" and rental property trusts that raise money from investors.  A lot of that money can, and often is, borrowed on margin accounts against the security.  But would not show up as a 'cash' purchase.

Matt1973's picture

Why only bad news on this blog?  Where is the Durable Goods (beat) coverage?

Quinvarius's picture

Take your devil talk elsewhere, filth peddler!

Quinvarius's picture

Every other data point seems to give a completely opposite impression these days.  Someone is fibbing, and they are a poor organizer.

dobermangang's picture

The government is bad at math and building web sites, but very good at lying.

Like Jim Rogers always says: "Never trust the government's numbers".

Matt1973's picture

Shorts never believe good reports...just complain and make excuses

Jumbotron's picture

We're just long shorts......because after all......"On a long enough timeline........"

papaswamp's picture

No surprise when 60% of Q3 consumer spending was on healthcare and wage growth has been anemic. The wealthy will have to trade homes among themselves as the rest of the housing market chokes on itself.

1835jackson's picture

Mortgage business will be a shadow of it's former self. Good.

ncdirtdigger's picture

Mel Watt will fix dis

22winmag's picture

What is the position of the pimps at the National Association of Realtors on this? 

Ballin D's picture

iirc october sales were actually quite high despite setting the prior 13 year low on mortgage applications. the ultrawealthy are still buying and theyre using cash. Faster transactions with less oversight for more valuable properties. what part of that would realtors be unhappy about?

pitz's picture

Won't be 'ultrawealthy' for much longer if they piss money away like that.

corporatewhore's picture

All I want for Christmas is a quitclaim deed.


pitz's picture

Housing won't bottom until all the debt has been liquidated.  In other words, during hyperinflation.

dcj98gst's picture

yields rising steadily now.  Ten year looks to break into new highs soon.