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

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
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.

Soul Glow's picture

Not in the opinion of Paul Krugman.

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).

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.

SheepDog-One's picture

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

S.M.T.U.Q.I.'s picture

The Obozo Muppet Bitchez keep BTFD and BTFATH.

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.

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...

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......

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.

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

ElvisDog's picture

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

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/

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!

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.

ArkansasAngie's picture

I guess we will see this in the closing report.

 

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.

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.

 

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.

russwinter's picture

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

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

Squid Viscous's picture

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

ziggy59's picture

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

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.

the not so mighty maximiza's picture

good time to buy house?

Osmium's picture

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

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.

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.

Squid Viscous's picture

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

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?" 

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.......

 

Caveman93's picture

Ramsey is a clueless jackass.

+1000 for independent thinking on you my friend!

SheepDog-One's picture

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

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

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.

forwardho's picture

Great comment!

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

It works if you work it.

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.  

SheepDog-One's picture

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

Magnix's picture

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

FreeNewEnergy's picture

Always good time to buy house.

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

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. 

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

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!

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.

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.

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.

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!