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Mortgage Applications Drop - Hover Near 19 Year Lows

Tyler Durden's picture




 

Despite being told by Bullard, Yellen (and numerous other Federal Reserve thinkers) that quantitative easing was aimed at improving the housing market, the data suggests that - somewhat predictably - it did very little for mom-and-pop organic real home-buyer but stoked speculation and fervor among fast-money cheap-funding investors (and as Marc Faber noted actually hurt the average homebuyer via un-affordability). The week-to-week ebbs and and flows in mortgage applications are notable  (this week saw purchase applications drop 5% and back near recent lows) but a bigger picture glance at just where this "recovery" has been tells a very different story about confidence among home-buyers.

 

Mortgage applications for home purchases have basically flatlined since the Fed began QE and hover now just above their lowest levels since 1995...

 

Charts: Bloomberg

 

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Wed, 02/12/2014 - 11:50 | 4427982 1835jackson
1835jackson's picture

You want your MBS? You can keep your MBS.

Wed, 02/12/2014 - 11:56 | 4428015 Pool Shark
Pool Shark's picture

 

 

Who needs a mortgage when foreigners and 1%'rs are paying cash with all their unlaundered money?

I for one welcome our new over[land]lords...

 

Wed, 02/12/2014 - 13:21 | 4428394 boogerbently
boogerbently's picture

THIS, to me, is amazing. (that it is considered news)

As interest rates grew, mortgage applications declined????

Whoa, dude, who'd a thunk.

Wed, 02/12/2014 - 13:58 | 4428586 johnQpublic
johnQpublic's picture

booger, you call a 30 year at 4.125 high?

 

locked in mere days ago

 

what i notice is recovery=false

obamao has NOT been good for the housing market

and makes me wonder, if you could buy a house with an ebt card, how would the market be doing?

Wed, 02/12/2014 - 17:40 | 4429731 clawsthatscratch
clawsthatscratch's picture

hmmmm, 

why not!? Whats another trillion or 10

Wed, 02/12/2014 - 14:42 | 4428810 Bangin7GramRocks
Bangin7GramRocks's picture

Drop the 30 year back to 3.0 and you will get this customer.
Get to work Ms. Yellen! Na, fuck that. I want a 2.5% 30 year mortgage. Ain't deflation a bitch?

Wed, 02/12/2014 - 11:59 | 4428016 Dr. Engali
Dr. Engali's picture

You didn't build that.

Wed, 02/12/2014 - 12:34 | 4428183 tip e. canoe
tip e. canoe's picture

You didn't grow that neither.

Wed, 02/12/2014 - 13:14 | 4428371 max2205
max2205's picture

Time to buy a house is when no one wants to buy a house

Wed, 02/12/2014 - 13:21 | 4428403 monad
monad's picture

First learn why noone wants to buy a house.

Wed, 02/12/2014 - 13:41 | 4428517 ParkAveFlasher
ParkAveFlasher's picture

You learn that when you try to sell your house.

Wed, 02/12/2014 - 13:59 | 4428593 johnQpublic
johnQpublic's picture

no customers

reason, no money

why?

no job

why no job?

no customers

Wed, 02/12/2014 - 11:48 | 4427983 Critical Path
Critical Path's picture

Its a recovery, they say

Wed, 02/12/2014 - 13:07 | 4428332 Jumbotron
Jumbotron's picture

Recovery is the new 1,000 ft glidepath for a 747.

Wed, 02/12/2014 - 14:00 | 4428604 johnQpublic
johnQpublic's picture

1000 foot glide path from 35,000 feet

graph that

Wed, 02/12/2014 - 14:51 | 4428846 Jumbotron
Jumbotron's picture

LOL !!    Just look at the chart above !

Wed, 02/12/2014 - 11:49 | 4427985 VD
VD's picture

blackrock with free funny money not to the rescue¿¿¿

Wed, 02/12/2014 - 11:52 | 4427988 Martial
Martial's picture

It's the weather, right?

Wed, 02/12/2014 - 14:02 | 4428616 johnQpublic
johnQpublic's picture

its not helping

people 'round these parts dont go house shopping during blizzards

 

Wed, 02/12/2014 - 11:50 | 4427989 Winston Churchill
Winston Churchill's picture

He's dead Jim.

Wed, 02/12/2014 - 12:14 | 4428077 Miss Expectations
Miss Expectations's picture

Because "he decided to expose himself to fatal warp core radiation in order to restore warp power to the Enterprise."

Wed, 02/12/2014 - 11:55 | 4428005 annabelleballow
annabelleballow's picture

"Hurt" is an understatement.

Wed, 02/12/2014 - 11:57 | 4428006 semperfi
semperfi's picture

Um, like, ITS THE FREAKIN' WEATHER !!!

Wed, 02/12/2014 - 12:57 | 4428297 Doubleguns
Doubleguns's picture

Storm has lasted since 2005. Long winter. 

Wed, 02/12/2014 - 11:55 | 4428009 Spastica Rex
Spastica Rex's picture

2004 was peaky.

Wed, 02/12/2014 - 12:00 | 4428022 Pool Shark
Pool Shark's picture

 

 

Careful there Rex; better visit your optometrist. You know the fed claims bubbles can't be identified in real-time...

 

Wed, 02/12/2014 - 11:58 | 4428010 Space Animatoltipap
Space Animatoltipap's picture

Orwell says recovery so ... it's recovery. Otherwise we will chip you into recovery mode. Arm or back, you may choose yourself since we love freedom.

Wed, 02/12/2014 - 11:58 | 4428012 sbenard
sbenard's picture

THE REAL ECONOMY!

IT'S THE OBAMALAISE ECONOMY!

Wed, 02/12/2014 - 11:56 | 4428014 Dr. Engali
Dr. Engali's picture

Damn polar vortex. Screwing up a perfectly good el presidente Zero inspired recovery.

Wed, 02/12/2014 - 11:58 | 4428018 Yen Cross
Yen Cross's picture

   There's 4 or 5 of my neighbors that are doing full remodels on their homes right now. Everytime I walk by them I chuckle with a snide laugh. Some idiots never learn.

   Let's take a HELOC and remodel the house at the top of the market honey. Just think about all the extra equity we will gain.

  Farkin retards!

Wed, 02/12/2014 - 12:02 | 4428025 Spastica Rex
Spastica Rex's picture

I put a new toilet in my 1,300 sqr ft 1957 crumbling brick rambler.

Didn't take out a loan, though.

Wed, 02/12/2014 - 12:09 | 4428044 Pool Shark
Pool Shark's picture

 

 

What???!!! You didn't borrow the money to make the improvement?!

Why,... that's Un-American! Why do you hate America?!

Rex is a terrorist!!!

Wed, 02/12/2014 - 14:02 | 4428631 johnQpublic
johnQpublic's picture

fucking 1 percenter

 

do you really NEED to have a toilet?

or are you just keeping up with the joneses?

Wed, 02/12/2014 - 12:02 | 4428030 fonzannoon
fonzannoon's picture

I have not seen any significant remodels in almost 2 years in my neighborhood. I still see the occasional cape get knockded down and some ugly wannabe McMansion go up, but more and more of them are sitting unsold. There is no hiding the deflation in real estate (around me anyway)

Wed, 02/12/2014 - 12:07 | 4428045 Yen Cross
Yen Cross's picture

   We're not far behind you guys Fonz.

Wed, 02/12/2014 - 12:20 | 4428111 chunga
chunga's picture

I think a lot of real people (not the Blackrock fucks) are downsizing and have vowed to avoid the fraudulent bankers forever.

A fellow ZH'er threw this link up a while ago. The guy built his house himself and saved a ton of money. He made this nice little blog about it.

http://littlehouseonthehill.weebly.com/

Wed, 02/12/2014 - 12:32 | 4428163 Yen Cross
Yen Cross's picture

  Thanks Chunga.

Wed, 02/12/2014 - 12:39 | 4428196 chunga
chunga's picture

He did a nice job on the house and blog didn't he?

I notice there it's been updated...apparently some author saw it and you can get his e-book on how to build with rough-sawn green lumber for free.

Wed, 02/12/2014 - 14:30 | 4428760 tip e. canoe
tip e. canoe's picture

where's the ebook chunga?

can't find it on his blog.

Wed, 02/12/2014 - 14:46 | 4428822 chunga
chunga's picture

I just looked at the blog again (with all the pictures it loads slow on my muppet line) and searched the blog for the author, Larry Michael Hackenberg.

He says if you send him an email with the form he'll send it you. Our daughter said she was going to get a copy so I can ask her how she made out if you want.

Wed, 02/12/2014 - 15:19 | 4428968 Clark Bent
Clark Bent's picture

That is agreat link. it serves to remind that houses are for comfort, shelter, and security. Not investments. Certainly not in this climarte where the vermin have their own rules and do not honor contracts. Or I should say the courts won't uphold contracts for hapless borrowers. The bank always wins and then they get to tap the federal government for bonuses. 

I advise everyone who willlisten, never borrow money from a big(ish) bank. how many times has the human race been taught this lesson? 

Wed, 02/12/2014 - 16:13 | 4429250 tip e. canoe
tip e. canoe's picture

cool, thanks for making the effort, mate.

will drop him a line as well.

Wed, 02/12/2014 - 12:51 | 4428264 greatbeard
greatbeard's picture

Nice link, bro, thanks.

Wed, 02/12/2014 - 12:09 | 4428047 Dr. Engali
Dr. Engali's picture

It's the same way here Fonz. The only houses that are moving are 'investment' properties with cash, and first time home buyers via FHA loans. The mid range properties are not moving at all.

Wed, 02/12/2014 - 12:05 | 4428037 Winston Churchill
Winston Churchill's picture

Funny you should mention that.

I've got remodel work coming out of my ears.

Goto go and make hay while the sun shines.

Wed, 02/12/2014 - 13:16 | 4428357 John Law Lives
John Law Lives's picture

There aren't many (if any) updates you can throw in a home that will fully return dollar-for-dollar(+) what you put into it.  Throwing money into home upgrades for the sake of one day getting more equity out is... a fool's errand (imho).

Wed, 02/12/2014 - 13:34 | 4428448 Stuck on Zero
Stuck on Zero's picture

Here are some updates that will really pay off:

 

  • Razor wire fencing
  • Underground bunker
  • Firearm vault
  • Sandbags around the perimeter
  • Primitive workshop
  • Solar PV panels
  • Water purifiers
Wed, 02/12/2014 - 13:53 | 4428563 disabledvet
disabledvet's picture

Proximity fuses. Claymore mines. Your own personal "eye in the sky."

A midget that laughs at you as you try and escape.

Wed, 02/12/2014 - 17:49 | 4429784 John Law Lives
John Law Lives's picture

"A midget that laughs at you as you try and escape."

Da Plane!  Da Plane!

Wed, 02/12/2014 - 12:07 | 4428038 IREN Colorado
IREN Colorado's picture

Insecurity Rules today..........

This drop in home mortgages is a function of the fact that only people who really need to buy or sell are doing so today. No matter how bad the economy is a minimum number of families and individuals still need to move, buy, and sell. That is because of job changes (losses), new members of the family being born (or moving back in?), or, today, the desire to slide further off-grid. 

People today just aren't buying the bigger, better, McMansion in nearly the numbers we saw in the pre-2008 days. Only Gov't workers can afford to upgrade for the benefit of the Joneses and allot of them are sniffing the wind and deciding to hunker down instead.

Also, the largest portion of home construction is in multi unit housing, eligible to be subsidized by you and me (assuming you are still a tax payer like me). Last, the number of cash transactions is mind boggling as resources move from the ether back into more tangible investments like residential properties that can be section-8 candidates, gold, and farms.

My conclusion is there is no recovery and there is very little long term hope for economic expansion. On the bright side, the GOP just gave the FOOs a year's worth of printing press priviledges with "no strings". So we have that going for US.

 

Remember: FOO = Friend Of Obama

Wed, 02/12/2014 - 13:57 | 4428590 disabledvet
disabledvet's picture

No substitute for new construction.

Everything else depreciates or worse...has to be lived in.

I've seen the rental units go up...now it's small hotel type things.

None of it involves creating a "living space" with any wow factor.

It is smaller so in theory it "costs less." But I still hold to my view the only safe asset is land. Build a mud hut if you have to.

Wed, 02/12/2014 - 16:27 | 4429325 SilverRhino
SilverRhino's picture

Land is a safe asset in a nation that has very little respect for property laws?   At least with portable wealth you can pick it up and relocate.

 

Wed, 02/12/2014 - 15:28 | 4429014 Clark Bent
Clark Bent's picture

Housing activity on the government model is about maintaining the power status quo in the Blue states. The Progressive fascists need to keep the prices high so as to keep themselves, and their structures like Fannie and Freddie, in control. But despite this looting of middle america to try to keep things functional, the housing based economy is o-v-e-r. A thousand years of funny money will not bring back that strange adventure down that cul-de-sac. It is notable that this whipsawing is not so prevalent in what will emerge as the new economy once the Blue states are finally collapsed. It seems providential that it is the saner, still American, states that have the advantages in reality, if not politically. Another reason why it is vital that South America have its itinerant population moved in for voting purposes. 

Wed, 02/12/2014 - 17:10 | 4429603 IREN Colorado
IREN Colorado's picture

Who Owns What?

A thought about our new "Mortgage Reality". The USG'ubment now owns almost everything being sold today. I say "owns" because the FOOs have driven the private mortgage market out of business. If the rivets pop out of the economic fuselage, and the whole thing implodes, it will be your friendly FOO who will be the one who tells you she's your landlord, because you couldn't pay your mortgage because you didn't have a job or your money is no longer any good. She's going to tell you "here's the lease, and oh by the way, she'll need a key to the house and no, you can't keep those nasty firearms" or any of those silly "bill of rights" things. 

We've set ourselves up for tyranny by how we "buy" our homes, along with everything else we've screwed up! I'm suprised our kids speak to US.

 

Always remember: FOO = Friend Of Obama

Wed, 02/12/2014 - 12:08 | 4428039 GrinandBearit
GrinandBearit's picture

The housing/RE market is so 2006.  It never fully corrected from those highs.

Banksters and realtors keep pumping and hoping.

 

Wed, 02/12/2014 - 12:42 | 4428222 Son of Loki
Son of Loki's picture

It's still a Bubble I agree. My house is still over 300% higher then 2002. It's not worth more then half theat at most.

Wed, 02/12/2014 - 15:40 | 4429098 Death By Cold S...
Death By Cold Steel Report's picture

I would highly reccomend a sell at 300%

Wed, 02/12/2014 - 12:07 | 4428041 buzzsaw99
buzzsaw99's picture

vacation properties are back to bubbly list price levels again. tons of people still stuck with 2nd, 3rd, etc., properties they can't sell or rent and are hemoraging cash even if they don't pay the mortgage. it will end badly, (again).

Wed, 02/12/2014 - 12:07 | 4428046 Obama_4_Dictator
Obama_4_Dictator's picture

Funny thing is I just sold my Condo in a short sale last year, come to find out that it was actually marked as a traditional sale.  I find it interesting and I belive it is the banks way of trying to get us into another mortgage, which I will not do.

Wed, 02/12/2014 - 13:59 | 4428543 ParkAveFlasher
ParkAveFlasher's picture

The system is perfectly harmonized not to multiply Boomer wealth and pass it to its gen X offspring to add to its own wealth, but to displace Boomer wealth or move it on a massive inter-generational carousel or bi-polar mechanism, so that wealth will only be passed when Boomers perish, and can not possibly be earned by gen X outside of legacy. 

This is why the big money of gen X has been wiped out or decimated, an entire generation of labor sowed and reaped. The best find themselves in dire straits, I know this personally.  Next up will be the Boomers themselves, who, pressured by a culture of Eternal Youth, challenged to take magic pills to harden their peckers on-demand, spurred on my the Money Honeys of the world to take on inordinate risks, blinded by will-to-power, to prove its generational supremacy, will commit what remains of equity, savings, and unencumbered wealth to a second home-buying wave, of course financed with low-interest rate mortgages, sso that they will be swallowed whole when interests rates rise overnight, with no leading indicators (or a very long, slow leading indicator), and will descend into the valley of a massive deflationary wave, tearing the very fabric of society along with. 

Wed, 02/12/2014 - 14:02 | 4428634 disabledvet
disabledvet's picture

Where will they buy this housing? San Francisico? Manhattan?

Interest rates have never been so low...heating prices have now soared.
That says to me...default.
There are no dollars left.

Wed, 02/12/2014 - 14:37 | 4428789 ParkAveFlasher
ParkAveFlasher's picture

I would say Florida, the Carolinas, Texas, the Gulf Coast...

Wed, 02/12/2014 - 12:36 | 4428182 Watson
Watson's picture

Tylers,

Any associated data as to average amount requested under each application?

Watson

Wed, 02/12/2014 - 12:38 | 4428201 Hongcha
Hongcha's picture

I dug me own craphole wit' me bare honds.

Wed, 02/12/2014 - 12:50 | 4428248 greatbeard
greatbeard's picture

>> I dug me own craphole

I didn't go that far but I did renovate a complete disaster mobile into a pretty nice place.  It's been taking this old guy about a year and a half of poking at it when I have the energy to renovate a place that most would consider tear downs (or haul-aways in the mobile home world).  Works for me.  Right now the problem is finding the right disaster property.  Two years ago they were a dime a dozen, now rare as hen's teeth.

 

 

Wed, 02/12/2014 - 13:07 | 4428338 John Law Lives
John Law Lives's picture

So, the Fed is producing a nation of renters and rentiers via QE.  I am sure that will end well...

FedFUBAR.

Wed, 02/12/2014 - 13:30 | 4428441 MeelionDollerBogus
MeelionDollerBogus's picture

CLEARLY smart-n-savvy investors are jumping out of the rigged & risky housing market and into safe venues, like crack & bitcoin.

Wed, 02/12/2014 - 13:57 | 4428598 gaoptimize
gaoptimize's picture

It would be interesting to see this data as per capita by age group.  I fear the worst is yet to come.

Wed, 02/12/2014 - 14:23 | 4428739 hangemhigh77
hangemhigh77's picture

The solution is to print more money and drive housing prices higher.  This way Jamie can buy another yacht.  Looking at house sales is stupid, look at yacht and mansion sales that's where the action is.  Who cares if millions are living out of dumpsters they don't go to the same parties as the banksters and the politicians anyway so who's gonna notice?

Wed, 02/12/2014 - 14:30 | 4428771 hangemhigh77
hangemhigh77's picture

Realtors are friggin so stupid.  Look at the auto industry. They sold TONS of cars and you know how they did it? No, it wasn't funny money from the banks and the government ment to prop up the industry. It wasn't 8 year loans at zero % interest.  It wasn't stuffing the pipeline to the point where the dealers were just paving parking lots to park cars. no it wasn't ANY of that.  Think what's the first thing you see when you go on a car lot?  BALLOONS!!  It's balloons you idiots!!  I go to a car dealer and the first thing I ask the salesman is, "what kind of cars do you have with a blue balloon?"  Balloons you idiots!!  Put balloons on those houses and they'll sell like hotcakes!!!

Wed, 02/12/2014 - 15:01 | 4428894 Woodhippie
Woodhippie's picture

Damn ... that's funny.  Coming from a former car dealer. 

Wed, 02/12/2014 - 14:34 | 4428781 TheRideNeverEnds
TheRideNeverEnds's picture

Its because the economy is so strong that everyone is flush with cash so people are just buying them outright with bernanke bucks. 

 

BULLISH! 

Wed, 02/12/2014 - 14:51 | 4428845 omi
omi's picture

I don't see how this is bad. This is good. First of all, Aunt Felda and her dog already have a house each. 

Some unemployed people that bought 3/4 million dollar houses are out of them (not that I want someone to lose a house, but one should have some manners in borrowing money to start)

So very few people need fresh mortgages, mostly mortgage mods. Lots of houses were bought with cash as they were too cheap.

Structual situation isa bit different so just pointing at a graph in ZH style "look, a graph!" is meaningless in my opinion.

Wed, 02/12/2014 - 15:02 | 4428888 Ned Zeppelin
Ned Zeppelin's picture

Chart takeaway is that mean reversion is a reality and we are back to where we started from before the housing market went on steroids.  Now you just buy a house you can actually afford. That is a smaller club that that which roamed the earth in 2002-2007.

Wed, 02/12/2014 - 16:15 | 4429251 noguano
noguano's picture

The only action I'm getting is rentals from the foreclosures.  No one can get a mortgage in my area.  It's EBT city.  Didn't use to be that way. My house is immediately surrounded by 5 foreclosures.  No one has jobs, it's quite depressing. 

Wed, 02/12/2014 - 16:18 | 4429277 The Navigator
The Navigator's picture

What I see here in SoCal is 50% of purchases are investors paying all cash.

The difference between 2004-2006 and now is, back then it was NINJA (no income no job) loans AND there was no real threat of deflation/hyper-inflation currency issues.

Today investors have no place to park their wealth except in equities and real estate WITH a real threat of deflation/hyper-inflation (and) currency issues.

Prepare as best you can - the writing is on the wall me thinks.

Wed, 02/12/2014 - 17:01 | 4429558 assistedliving
assistedliving's picture

if half of all homes bought CASH (ie no mort ap) then we're actually at ALL TIME HIGHS!  GO AMERICA!

http://blogs.wsj.com/developments/2013/08/15/report-half-of-all-homes-are-being-purchased-with-cash/

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