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The Refi Boom Is Dead; Applications Drop To Lowest Since Lehman

Tyler Durden's picture




 

The Fed's QE efforts were - if one is to believe the words spewed from their ever-lying mouths - designed to aid the man on the street, to lower interest rates, and enable another refinancing-led housing boom/bubble which would maintain the status quo and confirm the 'happily-ever-after' dream of every taxpaying (and non-taxpaying American). Today's data from the Mortgage Banker's Association confirms - QE's work is done and the refi boom is over. A 7% plunge on the week has pushed the refinancing activity index to its lowest levels since September 2008 - just before Lehman.

 

 

Chart: Bloomberg

 

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Wed, 04/30/2014 - 19:15 | 4714152 VD
VD's picture

but this time.......

Wed, 04/30/2014 - 19:19 | 4714160 Timmay
Timmay's picture

It's funny how so many economic metrics seem to be returning to, "just before Lehman."

Wed, 04/30/2014 - 21:00 | 4714463 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

All the cheap loans and magic money printing is no longer effective. Reality will soon strike.

Wed, 04/30/2014 - 19:18 | 4714154 vmromk
vmromk's picture

Yellen, the prune-faced cunt.

Wed, 04/30/2014 - 19:18 | 4714155 Bangin7GramRocks
Bangin7GramRocks's picture

Drop the rates down to 2.5% and you have a new customer! Get to work Ms. Yellen.

Wed, 04/30/2014 - 19:19 | 4714161 Xibalba
Xibalba's picture

2.5% down on a home overvalued by 70%?  

Wed, 04/30/2014 - 19:18 | 4714157 Rican
Rican's picture

Bailouts Part 3: Fuck You and Me

Wed, 04/30/2014 - 19:20 | 4714162 fonzannoon
fonzannoon's picture

That really is the theme here. QE's work is done. Now they may actually have to raise rates to avoid the Japan deflationary spiral even as housing craters again. Funny shit.

Wed, 04/30/2014 - 20:25 | 4714334 TruthTalker
TruthTalker's picture

yep setting us up to raise the interest rates until the economy implodes and they have to do qe to infinity and 0% again

Wed, 04/30/2014 - 20:53 | 4714436 walküre
walküre's picture

They can't raise rates. Even the hint of an increase would immediately cause a cascade of defaults across every paper.

Wed, 04/30/2014 - 19:22 | 4714168 Bangin7GramRocks
Bangin7GramRocks's picture

Rates return to historical norm and home values will be the last thing Americans will need to worry about. 

Wed, 04/30/2014 - 19:27 | 4714183 fonzannoon
fonzannoon's picture

the fed gave up on employment, now they gave up on growth. they yelled "mission accomplished!" today and scrambled out the door. it will get weird from here. I have no idea how, but i'm sure it will. 

maybe they throw out a big 275k nfp figure Friday to make Yellen look brilliant and hope that sparks a move up in rates. because as now the bond market is correctly calling bullshit.

Wed, 04/30/2014 - 20:02 | 4714269 Pareto
Pareto's picture

does nfp = no fucking problem.....oh wait......non-farm payrolls.  Both are correct.

Wed, 04/30/2014 - 20:23 | 4714324 homiegot
homiegot's picture

The rug is being pulled out.

Thu, 05/01/2014 - 05:17 | 4715172 tip e. canoe
tip e. canoe's picture

yup

Wed, 04/30/2014 - 19:31 | 4714170 TalkToLind
TalkToLind's picture

Fuck myRA.  Give me myMortgage.  I want a mansion.  I feel entitled to live in a mansion.  I've got $0.00 for a down payment.  Let the tax paying public subsidize 100% of that shit for me.  Implement myMortgage and the real estate market will EXPLODE to the upside and the economy will be saved.  Plus, it's for the children.

Wed, 04/30/2014 - 19:24 | 4714172 fzrkid
fzrkid's picture

yeah but look how much it spiked after lehman..... wash rinse repeat...

Wed, 04/30/2014 - 19:27 | 4714182 prains
prains's picture

..no, it's the whether

Wed, 04/30/2014 - 19:29 | 4714187 Colonel Klink
Colonel Klink's picture

FUCK'EM!  Let the banks DIE!  Stop using credit and finally watch the ponzi collapse.

Wed, 04/30/2014 - 19:34 | 4714194 SheepDog-One
SheepDog-One's picture

Oh great, so now the Fed can get busy raising rates then?
Nope.
Never.

Wed, 04/30/2014 - 20:01 | 4714262 new game
new game's picture

i'll say it again, rates are going down. ask your self who has the controls (tools) and will be keeping rates down.

if they go up, well,(it won't happen), but for arguements sake, then what? rates up and the thing implodes.

so, now i ask again, who is in contol and where are rates headed?

Wed, 04/30/2014 - 20:02 | 4714268 Colonel Klink
Colonel Klink's picture

They sell payment, so if rates go up, prices will have to come down.  The feral Fed and complicit government are in a very tight spot.

Wed, 04/30/2014 - 20:03 | 4714273 cheetahbaby
cheetahbaby's picture

The market is locked-up. Here in northern Virginia, normally insulated by government cheese and largesse, even 450K "starter homes" are languishing on the market. The south Americans across the street from us are stacked like cord wood. Their only possessions are the clothes on their backs and 15 year-old Toyota Corollas.  We are so fucked.....

Wed, 04/30/2014 - 20:46 | 4714405 j0nx
j0nx's picture

Sheeeit. No idea what nova you're in but I'm seeing the exact opposite. Houses sell in days and 20k over asking price is the norm. There are pockets of bad real estate in shitty areas like manassas park but fairfax and the better parts of pwc are nuts right now.

Wed, 04/30/2014 - 20:55 | 4714444 Darksky
Darksky's picture

Alexandria, Arlington and City of Falls Church will always go up. Any neighborhood within a mile of new Silver Line thru tysons to dulles will do good. Rest of nova speaks Spanish now. Thats a big reason why i left. Couldnt order food in a fucking restaurant without speaking spanish. Actually got so bad I bought the Spanish rosetta stone and started learning a second language. When we moved to Texas i thought my spanish would come in handy. Was pleasently surprised to find only English spoken down here.

Thu, 05/01/2014 - 07:04 | 4715256 j0nx
j0nx's picture

I agree. People bitch and moan about San Diego and all the illegals. San Diego aint got shit on the NoVa area with regard to number of illegals running around. I've spent time in both areas and NoVa is pretty much like Mexico light these days and what's not Mexican is liberal and voting that way. I give Virginia maybe 5 years before it's a full out blue state much to the chagrin of the south and west parts of the state.

Wed, 04/30/2014 - 20:48 | 4714416 Darksky
Darksky's picture

Left City of Falls Church for Texas 3 years ago. So your telling me the Falls Church area in Fairfax County near Seven Corners is still as fucked as it was three years ago? glad I fucking left.

Thu, 05/01/2014 - 00:37 | 4714968 silentsock
silentsock's picture

All of Northern VA is fucked. I'm on the exact opposite end of the state, and would be more than happy to 'donate' NOVA to Maryland! They would most likely be happier in Maryland anyway.

Wed, 04/30/2014 - 20:03 | 4714275 Professor Fate
Professor Fate's picture

Oh yeah!  Blackstone's balance sheet looks great with near zero-interest borrowing thanks to QE.  But what about their renter's balance sheets?  This is a whole new chapter in predator financing.  Buy entire communities of properties with Fed sponsored cash and then jack the rent to suck dry what's left of the middle class disposable income.  America's middle class now lives paycheck to paycheck...just one water pump repair away from insolvency.  Blackstone jacks rents. Thanks to Bernanke and the Fed for what is surely a monumental middle class ass fuck that still goes on.

Fate the Magnificent
"Push the Button, Max" 

Wed, 04/30/2014 - 20:05 | 4714280 new game
new game's picture

i've heard every arguement for the last 30 years that rates have got to go up, and where are they?

trending down. hey, gander over yonder to yapan. gander at 17t of debt. gander at where they have to go...

also, this train is on the tracks and can go, shit show and all a lot longer than you can imagine...

 

Wed, 04/30/2014 - 20:24 | 4714325 QQQBall
QQQBall's picture

2.66% is still almost double the low. Rates are not low enough to spur new housing demand unless prices drop. Wake-up, how low do rates have to go to start another refi boom?  if rates drop again its because the economy is DOA.

Wed, 04/30/2014 - 20:12 | 4714294 new game
new game's picture

don't forget, that the fear trade hasn't even begun. foreigners buying treasuries(thank the fed/dollar for fucking them over-zirp/exporting inflation) to fill the gap left by

the great un-qe. wait til the real econ reflects equity prices; the whooosh to treasuries and we be seeing low two's on the ten by summer end; my prediction...

Wed, 04/30/2014 - 20:15 | 4714306 homiegot
homiegot's picture

It's dead, Jim.

Wed, 04/30/2014 - 20:20 | 4714319 auntiesocial
auntiesocial's picture

same as it ever was...

same as it ever was...

same as it ever was...

When I heard Timmy Geithner say that 700B was to "foam the runway for the banks" I knew that this downward spiral would just get worse. Hats off to all the fuckers banking in on Wall Street. Hope you choke on it. We produce nothing as a nation. Our pols don't really give a shit about the national debt- just as long as they all have chairs when the music stops. 

Wed, 04/30/2014 - 20:21 | 4714321 QQQBall
QQQBall's picture

Do you mean the low rates pulled refi demand forward? Time to push 2nd TDs to the sheep.

Wed, 04/30/2014 - 20:48 | 4714419 venturen
venturen's picture

we need to rescue the criminal bankers

Wed, 04/30/2014 - 20:56 | 4714450 Arrowshot
Arrowshot's picture

So we can watch them dance at the end or a rope.

Wed, 04/30/2014 - 21:04 | 4714473 walküre
walküre's picture

Don't forget that this is post Lehman environment. Demand for housing was largely driven by speculators. Flipping two, three, four or more homes before they were even finished got done nationwide.

That part is not happening now. The economy is scraping the bottom of the barrel. People who got burnt badly 5 years ago aren't coming back even if they have still have the same jobs. Lessons were learned. The next generation isn't ready or in a position to make that purchase yet. 5 years is not a long time considering how badly things turned out.

We're also in solid $4/gallon fuel territory everywhere and trend is rising. The big squeeze of the wage slaves is happening as we speak. Who or why would anyone even try for a refi.

Nobody is making a move, are you? It's like living in the fucking Twilight Zone.

Wed, 04/30/2014 - 22:38 | 4714730 deerhunter
deerhunter's picture

any one here know if you can walk away from a secured home equity loan with the mortgage when you throw the keys in the mailbox?  

Wed, 04/30/2014 - 23:22 | 4714843 MisterMousePotato
MisterMousePotato's picture

On second thought, I have enough problems already.

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