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The Housing Recovery Continues Apace - Mortgage Apps At 14-Year Low

Tyler Durden's picture




 

How much longer can the myth of a housing recovery remain alive in the mainstream media's narrative? The smoothed average of Mortgage Applications in the US fell to its lowest since September 2000 this week. Mortgage applications have slumped for 9 months... as mortgage rates have declined notably... but still we are told 'rates are just too high'. And yet, bullish market protagonists are convinced rates are due to rise (and the bond market is wrong) - one can only imagine the slump if that should occur...

 

h/t Brad Wishak of Newedge

 

Charts: Bloomberg

 

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Wed, 08/13/2014 - 10:02 | 5086889 LawsofPhysics
LawsofPhysics's picture

...and cash buyers at an all time high.  "winning"

 

printing money and handing it out to a select few is not a sound basis for a monetary system folks.

Wed, 08/13/2014 - 10:18 | 5086983 Soul Glow
Soul Glow's picture

Not in the opinion of Paul Krugman.

Wed, 08/13/2014 - 10:21 | 5086993 NoDebt
NoDebt's picture

Paul Krugman refinanced a year ago like everyone else.  It's over.  Mortgages are something we'll tell our Grandchildren about (and they won't believe the story).

Wed, 08/13/2014 - 10:25 | 5087019 GetZeeGold
GetZeeGold's picture

 

 

Mortgage Apps At 14-Year Low

 

Cause people with 29.5 hr/wk jobs usually just rent.....but it sounds like 90% of them are going to avoid the IRS tax.....so maybe it will pick up a tad.

Wed, 08/13/2014 - 10:28 | 5087053 SheepDog-One
SheepDog-One's picture

Livin on Ramen and got the 80 inch LED and Xbox from rent-a-center.....all a primate really needs.

Wed, 08/13/2014 - 10:35 | 5087108 Hippocratic Oaf
Hippocratic Oaf's picture

Nilguh, please!

Wed, 08/13/2014 - 10:46 | 5087153 S.M.T.U.Q.I.
S.M.T.U.Q.I.'s picture

The Obozo Muppet Bitchez keep BTFD and BTFATH.

Wed, 08/13/2014 - 11:31 | 5087380 Yes We Can. But...
Yes We Can. But Lets Not.'s picture

Fourteen years is a long time, so a fourteen year low is saying something.  Also, in the past 14 years the US population has grown 13% from 281MM to 317MM.  So there are more households today, thus more potential mortgage applicants.  So, if the mortgage app figures are total and not per capita, then the drop in mortgage apps is even sharper than presented. 

I'm so glad I got outta my house in DC last month.  And I did it FSBO! WooHoo.

Wed, 08/13/2014 - 11:50 | 5087482 MachoMan
MachoMan's picture

Congrats.  It's mind boggling anyone pays someone else 7% of the gross sales price of their home to plop a sign out front, take some pictures, and post the pictures on a MLS...

Wed, 08/13/2014 - 12:31 | 5087662 Yes We Can. But...
Yes We Can. But Lets Not.'s picture

I paid $90 for 6 month listing on MLS, plus $25 for a sign.  Saved around $21k vs. paying 3% to list a $700k+ home and got multiple contracts and more than my list price.  FSBO is doable, esp. if not in a rush.  Still had to pay buyer broker, though.  Am about to use those savings to buy a new vehicle......

Wed, 08/13/2014 - 14:36 | 5088284 CheapBastard
CheapBastard's picture

Transaction costs kill the avergae buyer/seller in RE. Plus, it's an extremely illiquid asset. I think more peeples are waking up to that reality despite being pounded 24/7 with RE propaganda.

Wed, 08/13/2014 - 15:34 | 5088618 JRobby
JRobby's picture

Funny thing about that 14 number: 2000 was the year Greenspan turned the spigot on full open with his interest rate policy which created the housing bubble right up through 06 and part of 07 THAT CRASHED THE FUCKING ECONOMY

Wed, 08/13/2014 - 11:14 | 5087286 ElvisDog
ElvisDog's picture

Don't forget the Samsung Galaxy and the $250 basketball shoes.

Wed, 08/13/2014 - 10:25 | 5087026 Keyser
Keyser's picture

In the mean time, this is the new rage...  The "new normal" being pushed by the left... 

http://www.huffingtonpost.com/news/tiny-homes/

Wed, 08/13/2014 - 11:02 | 5087231 Bangin7GramRocks
Bangin7GramRocks's picture

So what the bond gamblers are saying is that things are going so well, we may need to fuck it up even worse. Great plan fellas! New Porsches for everyone!

Wed, 08/13/2014 - 10:25 | 5086999 robilla
robilla's picture

I would prefer a much better metric that measures the approval rate of applications submitted vs just the total number of apps taken.

That's not downward sloping.

Those applying for a mortgage now understand they can still get one, just requires a LOT of documentation.

You weed out the bad apps before they are even taken. Quick credit report, understanding of job situation and finances... you do that before you complete an official app.

I know... it's what I do.

EDIT: Go ahead and "down arrow" me. Just because you read ZH and have the capacity to add ever-so-pithy commentary (let me guess, buy gold bitchez) doesn't mean you actually understand what you're looking at. No, we're not in a recovery, that's obvious. But looking at simply charts and figures like the above doesn't tell you one thing important.

Wed, 08/13/2014 - 11:29 | 5087368 ArkansasAngie
ArkansasAngie's picture

I guess we will see this in the closing report.

 

Wed, 08/13/2014 - 13:01 | 5087798 Bay of Pigs
Bay of Pigs's picture

No, you're wrong, that's why you get down arrowed. My friend had to shut his doors in Seattle (mortgage company) after 20+ years because there was NO BUSINESS...people could NOT QUALIFY. The chart is accurate blockhead.

Wed, 08/13/2014 - 15:37 | 5088640 JRobby
JRobby's picture

WELL Thank You Mr. Helper!!!!

I still have my money and banking textbook (ECON 104) from 1982 if you want to pull some tasty quips out of there to post here too.

I can send it to you for free. It is no longer accurate.

 

Wed, 08/13/2014 - 10:28 | 5087045 JRobby
JRobby's picture

All cash hedge fund and private equity buyers.  Over 60% of FL purchases all cash in 2013.

They get their cash the old fashioned way: a direct pipeline to the printing press.

Potterville

Who would want to buy in this shit show economy by borrowing from the WellsCitiBofAChase cartel?

 

PS: fall behind on your payments on a property with equity and a hedge fund or private equity co might buy your loan.

Wed, 08/13/2014 - 10:07 | 5086914 russwinter
russwinter's picture

"Belgian Buyer" Of Treasuries is BIS-Rothchild Backdoor Money Laundering

http://winteractionables.com/?p=13797

Wed, 08/13/2014 - 11:02 | 5087229 NotApplicable
NotApplicable's picture

Color me shocked.

Wed, 08/13/2014 - 10:06 | 5086916 Squid Viscous
Squid Viscous's picture

Are we back to "bad news is good news" now? I didn't get the memo...

Wed, 08/13/2014 - 10:08 | 5086920 ziggy59
ziggy59's picture

'Bullish' mortgage comments are missing a 'T' and rearranged...
They mean 'BullshiT'...

Wed, 08/13/2014 - 10:10 | 5086927 ziggy59
ziggy59's picture

It wont be long before the revised re re vised GDP is revised again especially by the likes of the Muppet Slayer, Goldman.

Wed, 08/13/2014 - 10:12 | 5086942 the not so migh...
the not so mighty maximiza's picture

good time to buy house?

Wed, 08/13/2014 - 10:47 | 5087155 Osmium
Osmium's picture

There has NEVER been a better time to buy a house!

Wed, 08/13/2014 - 11:33 | 5087390 ArkansasAngie
ArkansasAngie's picture

Personally I'll wait for a better price.  One that strips out the Fed's asset bubblenomics.

Affordable housing.  Horse manure.  

If you got one and you wanna sell ... I'd be selling now.

Wed, 08/13/2014 - 14:59 | 5088389 JRobby
JRobby's picture

Wise policy

Wed, 08/13/2014 - 10:19 | 5086981 Dexter Morgan
Dexter Morgan's picture

My original plan when I started stacking gold and silver was to get a house paid for as I approach retirement.  Now I am thinking, Why should I buy a house and become a milk cow for annual property tax bills in a manipulated real estate market when I can be sipping a margarita on the beach in Costa Rica and still have my stack?  Besides, Mac and Gatos on KTAR radio in Phoenix are screaming that real estate is a still a great buy, and Dave Ramsey says the paid off house is the new status symbol.  I used to think so, now I think if everybody thinks that's moving up, I'm moving out.

Wed, 08/13/2014 - 10:22 | 5087011 Squid Viscous
Squid Viscous's picture

LOL at Dave Ramsey, what a dickhead, how is that guy still on the air?

Wed, 08/13/2014 - 12:48 | 5087778 saltedGold
saltedGold's picture

Exactly!  I listened to part of his show a few times a couple of years ago.  His base advise is simple, pay off your highest interest debt first, then take the money you were putting toward that and use it to pay off your other debt.  But then people ask for other advice and that's where I go WTF?  His example investment returns are based on 8%/year!!  I heard him tell people not to invest in gold, buy real estate, etc.  The absolute worst are the bullshit callers!!

"Hi Dave, I make $180,000 a year, I have $257,000 in my savings account, $22,000 on my mortgage and $1000 on my credit card.  Should I take the money from my savings and pay off my debt?" 

Wed, 08/13/2014 - 15:02 | 5088414 JRobby
JRobby's picture

Hilarious! Thanks

I know the wait does seem endless but Ramsey is November's poster boy for euthanasia. There are so many in line I am surprised he even got in for 2014.......

 

Wed, 08/13/2014 - 10:23 | 5087016 Caveman93
Caveman93's picture

Ramsey is a clueless jackass.

+1000 for independent thinking on you my friend!

Wed, 08/13/2014 - 10:28 | 5087020 SheepDog-One
SheepDog-One's picture

'Status symbol' oh so ultimately important to Homo sapiens primate. Bonobos are smarter in so many real ways to humans.

Wed, 08/13/2014 - 10:35 | 5087103 Dexter Morgan
Dexter Morgan's picture

Dave Ramsey calls Peter Schiff an idiot.  haha  Ramsey says the dollar isn't going to crash.  Buy houses!  haha  https://www.youtube.com/watch?v=S98_eMax9xo

Wed, 08/13/2014 - 10:42 | 5087131 FreeNewEnergy
FreeNewEnergy's picture

Dex, +56 for Billy Joel reference. "...moving up, I'm moving out."

As far as owning is concerned, and paid for, which is more important, property and school taxes are a fact of life. Sucks, but true. For most people, taxes are the #1 expense in their lives, but they view this as normal. It's stupid, really, Fix your house up and it gets reassessed at a higher rate, you pay more. Let it go to shit, well, it goes to shit, and nobody really likes living in shit.

My solution is to make your house and your land, at least, marginally productive. Tear up half the back yard, put in a garden (until they fine you for using non-Monsanto seeds). Put up a couple of solar panels, keep them off the grid, use them to power a man-cave or fridge in the garage, motion detectors, anything useful. What the utilities pay for putting power back into the grid is shit, a screw job.

Insulate if in a cold climate, grow some herbs indoors, use a spare room for a home office, take tax deduction. These are just a few suggestions. Given some thoughtful consideration, a home can be more of a small enterprise than just a home. Make use of it and reap the benefits.

Just a back-of-the-envelope calculation. Let's say your property/school taxes are $3k/year. Grow some vegetables - not hard - save maybe $500-700 in a year. Solar will produce about $20/month in electric for security or lifestyle. Another $200-300. Deduction for use of a room as an office (say 1/10th of home expense, which BTW includes utilities and taxes) another $400-500. So, with a little imagination and some sweat, that's $1100-$1500 a year in savings/deferred expenses. Soon enough, you tax bill doesn't appear so bad.

Not to say taxes are a PITA, they are, but individuals must begin taking matters into their own hands. Our "leaders" in business and government are not going to be of any assistance. Also, vote "NO" on any new town/county spending proposal and encourage your neighbors to do the same. Home ownership is a very good thing, but, one has to accept the responsibilities and plan accordingly.

I've thought about moving to Central America or elsewhere, but, you know what? Most places in America have the others beat by a long shot. Americans have to start doing what our ancestors did that made us a great country. Work individually toward reasonable goals, help neighbors, beat back the forces of oppression (school boards, etc.). Good luck.

Wed, 08/13/2014 - 11:04 | 5087239 forwardho
forwardho's picture

Great comment!

No complaining, just answers from a person with a glass half full.

It works if you work it.

Wed, 08/13/2014 - 11:24 | 5087333 Dexter Morgan
Dexter Morgan's picture

Great ideas!

Wed, 08/13/2014 - 12:01 | 5087531 MachoMan
MachoMan's picture

This is what everyone has to do to stay afloat.  It is the new middle class way of doing business.

I think your home office calculations are a bit optimistic due to the new home office safe harbor method of calculating your deduction...  most people are probably well advised to take it.

Further, you'll need to determine if you can even deduct your mortgage interest, state income tax, property tax, etc.  Many people don't have enough expenses in the right categories to itemize their deductions.  This may have a material impact on the rent or buy decision...

The new future is for everyone to be an independent contractor and, thus, self employed.  While the economy is pushing this result, it has significant tax implications in that you will have a wider array of tax deductions/reductions at your disposal, including turning your house into a base of operations for your business (also why CRE is doubly fucked).  About the only issue you might run into is a zoning/bill of assurance restrictions (and be sure to get a privilege license from your city if you're actually conducting business), but these issues only tend to come up if you have a lot of cars coming in and out of your driveway...  most of the tax authorities do not and cannot cross reference the addresses that well to drop a dime on you with the city.  

Wed, 08/13/2014 - 10:21 | 5086997 SheepDog-One
SheepDog-One's picture

Pretty hard to buy a house on a part time min wage temp job.

Wed, 08/13/2014 - 10:35 | 5087106 Magnix
Magnix's picture

Of course, we all know that. You didnt even have to comment that at the first place. IQ that low?

Wed, 08/13/2014 - 10:21 | 5087001 FreeNewEnergy
FreeNewEnergy's picture

Always good time to buy house.

Also, "me suck long time." -- Lawrence Yun, NAR.

Wed, 08/13/2014 - 10:36 | 5087109 ghostzapper
ghostzapper's picture

They can still rig certain markets where it's all just computer digits ands algos (though eventually equities will have that final crash) but this one is over boys.  They got the Blackrocks out there in to run this bubble up and foreign cash seeking a home but this one can't be rigged forever by the Fed.  Slow, grinding, sustained move down for real estate until it reaches levels BELOW what one would consider "fair" based on incomes and comparable rents, etc. 

Wed, 08/13/2014 - 10:41 | 5087129 btdt
btdt's picture

location, location, location: Santa Cruz County, CA (sillie con vallie bubble edge)

July 2014:

Median Home Price $729,250 +21.7 yoy

Wed, 08/13/2014 - 10:45 | 5087139 passenger_pidgin
passenger_pidgin's picture

How much longer can the myth of a housing recovery remain alive in the mainstream media's narrative?

As long as the pretty morons on TV can live confortably from reading the teleprompter (which I think is a while).

I wonder if American (or perhaps Western) economic decline have been allowed to happen because the vast majority of productivity actually disappeared decades ago, and all that remains is the services and commodities sectors.  That would make it a lot easier to pull the rug out from under the middle class.  Since a small percentage of our jobs are vital to existing infrastructure and far less are dedicated to the production of goods we consume, what would be the harm in famine or plague?  Less people to help you buy a TV? I think that our record low incomes (adjusted for inflation, of course) show the complete lack of leverage that any worker or workers have anymore.  Automation and global competition have paired with our social decline to lower the mean for all (of the working classes).

Today, creativity is getting the right pictures in the right places on your social media, and innovation is how to find an app for everything.  There is no more danger of competition for the big boys; all the shit labor goes into some shit pool, for shit money, to buy shit food, and shit clothes, which were inspired by shit media, which on top of selling shit products, also sells shit morality and values.  Some people claim that this is a case of the snake swallowing its own tail, I would argue that the snake is burowing its head into its ass.

The misallocation of capital can go on ad infinitum, if the overclasses have managed to automate necessary production; but why continue the same game with all of those useless eaters? Could be MOAR for them!

Wed, 08/13/2014 - 11:00 | 5087224 edifice
edifice's picture

The top crust has everything it needs; they already own all of the valuable land and assets. We are merely a byproduct that can either stay or go. It doesn't really matter, to them. It's better to have a gradual decline than a sudden one. They learned from the Depression, believe it or not, on just how to institute a decline.

Wed, 08/13/2014 - 10:55 | 5087186 FreeNewEnergy
FreeNewEnergy's picture

Dude, with $729,250 here in Rochester, NY (it's even better in Buffalo), you could buy a small block of houses (10-15, maybe more) on a cul-de-sac in a beat up neighborhood, gate it, tear a few down, farm it, live like a monarch, maybe get some of the locals to become your slaves farmhands. Fuck, I checked the monthly payment on $600,000 at 4% for 30 years. It's $


2,864.49

Shit, rent a fucking van. People are sooooooooo fucking stoooooopid.

Wed, 08/13/2014 - 10:55 | 5087200 I Write Code
I Write Code's picture

That's some chart.  Wau.  Waitaminute.  The spike on 2008-9 means it includes refis.  In which case the red line is really just dependent on the blue line.  BOGUS CHART.

So cancel my rant about foreign money and US real estate, it's probably still true but I need a real chart to correlate it.

Wed, 08/13/2014 - 11:00 | 5087223 NoWayJose
NoWayJose's picture

It's not rates - it's prices that have to fall. And they will. However, who actually 'owns' the houses that must fall in price? The big banks! So the Fed, and FICO score adjustments, and student loan bailouts, etc are all geared to protect the mortgage holding banks!

Wed, 08/13/2014 - 11:11 | 5087270 boeing747
boeing747's picture

Fuck Japs, geiger counter in my bedroom (closed window) reads 1.09 usv/hour moment ago.

This morning a little windy but no clouds.

San Frans Bay Area is fxcked by radiation.

 

Wed, 08/13/2014 - 11:34 | 5087393 orangegeek
orangegeek's picture

just read the local by laws, pick your favorite abandoned dump and squat - much cheaper

 

load up on some ammo and weapons - you may need them if the owner shows up

Wed, 08/13/2014 - 12:20 | 5087650 Ban KKiller
Ban KKiller's picture

Yes. A friend did just that. He had a locksmith come over and change out the locks and moved in. Not a dump. He has claims filed against the bankstes and will win this home. Void judgment based on lack of standing by the foreclosure entity. 

 

Wed, 08/13/2014 - 11:54 | 5087502 Bunga Bunga
Bunga Bunga's picture

Calm down, the Federal Reserve and cash buyers are just saving the economy. They will later sell it them to real occupants at a premium. Profits and rising home prices are a win-win for all of us. GDP will skyrock. Economy 101. Watch and learn.

Wed, 08/13/2014 - 12:18 | 5087638 Ban KKiller
Ban KKiller's picture

Still living in my home for "free", taxes, insurance and upkeep costs only. The banksters want to dismiss the case now as I counterclaimed forgery and attemped fraud. They tried a summary judgment motion and I countered with sanctions for..you guessed it...forged note in the complaint. Then they did a motion to change attorneys (golly, wonder why?), I opposed. Then they did a motion to delay scheduling order deadlines. Guess who filed the motion for the scheduling order? That is correct, the plaintiff. I opposed. They admitted in discovery, yes, I did massive discovery on them, that they gave up the note and allegedly assigned away the mortgage to another well know criminal outfit, Nationstar Mortagge, LLC. So the first plaintiff, is out of the picture. I won't back down until the forgery matter is heard in open court. They sure as shit don't want that. Docket hearing coming up. We had a scheduling hearing and they said they were not ready to move forward! WTF, they are the moving party. I told the judge I would object to any delays. We can't address any issues of their having standings until we look at the evidence, the note, they submitted.  

So long story short, the banksters are bullies who can not stand up to law, rules and regulations. Naturally I will be seeking damages, treble under Unfair Trade Practices Act. 

Death, by law, to banksters and their underpaid, swimming in school debt, attorneys. 

Meanwhile, I am not making applications for a new mortgage or intending to move. I am taking that money that I am not paying them and putting it into the economy...lead and PMs. Garden is going well with tomatoes coming on! Chard, beets, cabbage, grapes, herbs all doing well. 

Wed, 08/13/2014 - 13:09 | 5087853 NickVegas
NickVegas's picture

You need to write a book about how to fight the man with the man's tools. I'm serious. I would buy it.

Wed, 08/13/2014 - 13:46 | 5088015 daveO
daveO's picture

My hero! I paid mine off before all the MERS stuff came out. Oops.

Wed, 08/13/2014 - 14:19 | 5088206 novictim
novictim's picture

That was BEAUTIFUL!

Yes, if they don't have the REAL note, then they don't have standing to claim ownership.  Nice!

Wed, 08/13/2014 - 13:08 | 5087844 novictim
novictim's picture

So when is this shit hitting the fan?  When can we expect the next housing crash?  What are the indicators to watch for and how do they predict the timeline?

The last collapse 6-8 years ago had the underlying weakness of Subprime lending/LIAR loans, ARMs.  Today, the ARMs are certainly back in play but the LIAR loans and NINJA loans have YET to return.  That says to me that forces other than poor wages and no jobs will presage this collapse.  Investment money along with the FED ZIRP/Tapering QE/Banking collusion are a prop to this "market" that I just can't predict.

Also, the market has been dominated by cash buyers who represent some 30-40% of all prime area purchases.  That means that "Animal Spirits" may be the most important factor.  Those are unpredictable by definition, right?  Or have they been tamed somehow?

That said, investment money IS purportedly pulling back and now has dropped to about a quarter of all sales but that is still a lot, right?  I hear that the Chinese investors are being stopped by the PRC to stem capital flight... but who really knows?  CHINA is even more bankrupt than Japan and yet no one talks about this.  So lies are all we have to go on and core truths are NEVER acknowledged. 

Frankly, how different is this whole system from that portrayed in The Matrix?  Nothing we see is anything other than what we are MEANT to see. On going agreements among China/America/Europe/World central banks are secret and that is not just protocol, that is how the system is kept afloat. 

And we Muppets are the enablers of all of of this. We use the term "rigged" like we disapprove but we still pretend that people who are poor and people who are rich are somehow deserving of their status. 

"Boy, glad that is not me living under that bridge!"

Frankly, I suspect that the oligarchs with their NSA/International Spying Bloc have the lower level peeps in all the financial sectors so cowed and intimidated, have all of the world's financial operatives so fearful on a very personal career-busting level, that we will -never- know up from down and left from right. 

We may never even know when the shit hits the fan even after it has done so.

Maybe the stock markets around the world have computers systems that just crank out the data we are all meant to see?

Maybe the real collapse occurred 6 months ago?

Wed, 08/13/2014 - 13:13 | 5087862 novictim
novictim's picture

Hey! 

I was just kidding.  It's 1pm on Hump Day and don't you think you should be drinking a Rum and Coke about this time?

Wed, 08/13/2014 - 13:14 | 5087864 Dingleberry
Dingleberry's picture

It has been shown time and again over the last several years that the market cannot handle anything close to 5% rates. Rates have inched up past 4%, with a decrease in mortgage apps.....what does that tell you?

We know that first time buyers are down about 30-50% from long-term RE normal.....what does that tell you?

Rising student debt is inversely correlating quite nicely with young buyer apps....what does that tell you?

And of course, the Fed has decided to pick a winner in this market: current home owners....fuck all you buyers.....and will do so ad infinitum.....what does that tell you?

Here is what it tells me: if you are young and struggling to make ends meet, be very nice to mom and ask her if she still has room in her basement. 

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