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Mortgage Purchase Applications Plunge To 19-Year Lows
Presented with little comment.. because realistically what is there to say about a so-called 'housing recovery' when the volume of applications for home purchases is the lowest since August 1995. Keep believing that lower rates will support home prices... keep believing the Fed's QE worked... or face facts, this is not your mother's housing market any more...
The Recovery...
The long-term...
The transmission channel is officially broken...
Charts: Bloomberg
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Is it a bad news Wednesday?
BRING OUT THE KARDASHIAN THREAD!
We are most efficient as debt slaves when we are renting multi-family housing.
You can get a sub 1% - 35 year mortgage in Tokyo ....
Pretty sad when even the sub-prime mortgage business won't rebound... Perhaps the numpties that lost their asses on ARMs the last time learned a lesson...
Nothing moving in my area.
Absolutely nothing.
Echo crash
Around here, the crash happened 5 years ago. The wreckage is still smoking and, occasionally, another piece falls off. Not Detroit quite yet.
Same here in s Florida.
A client of mine,who became a realtor subsequently,tells me nothing is closing under $1m,
and that segment has slowed as well.
A shitstorm is about to unleash after this election.
There's a difference between then and now. Not sure what it looks like in your neighbourhood but:
1995 ... back when I could have bought a good house for half the minimum wage.
Now that same house costs 100% of a tradesman's wage. Okay, maybe 100% of a bad trademan's wage and 80%-90% of a good tradie's wage.
My nephew just bought a place outside of Houston, nice area, and seller lowered the price again and again ... ultimately from the list of $586,000 to $495,000. Not a bad deal but property taxes there are a killer -- 3.5%
I think that's why several very nice houses there are up for sale -- those property taxes come due in November he said and that's a lot of hard-earned after tax money. Many buyers don't realize how expensive it is to 'own' a house. Most of his neighbors he's met paid cash, and are Chinese, Iranian and there's one Russian. The realtor said very few Americans can come up with that kind of cash.
Yiks !!!!!!!!!!!!!!!!!!!!!!!!!!!!
If you can actually itemize deductions, which you almost certainly would if you're buying a house that expensive, then the bite isn't so bad... probably get back 1/3 of the cost of the property taxes with his likely marginal tax rates... still incredibly annoying at best, and absolutely insurmountable and soul crushing at worst...
Properties are selling the same day as being listed for 10% - 15% over asking price where I live... Yeah, that's right, I live in Texas... Most of the buyers are Chinese and are paying cash...
Same scenario here in Las Vegas area Keyser. Lots in a new, mountainside development are selling for $925K for .46 acres and there is a waiting list for the more prestigious lots. The highend homes $800k+ are flying off the market (the vast majority all cash), while there is a glutony of average family homes on the market. Lots of Chinese and Canadian (Alberta oil money) buyers.
He better keep a healthy distance. Especially, from the Russian. There's been a few move in around here. Drug dealers.
Winston. Southern California has seen a surge in over $1 million dollar real estate sales. As for the rest, a looming water shortage will have a bad knock on effect for growth and thus housing. The continued fall in wages and rise in health care costs make wage earners hard pressed to afford home mortgages. The prime areas like Florida and Southern California are seeing hot money from around the world coming home to America for safety, and bug RE is where lots of it is parking.
Not everyone needs to own real estate! Buying a house to live in is not, NOT, an investment. It is a house to live in! There are many good reasons to buy realestate. Figure out if you are buying for a good reason or buying to be like the rest of the sheeple.
lol.priceless comparative illustrations...kudos
Whoa - who are the chicks on the right????
think of the poor bankers
Don't worry they will just charge MOAR!
What if...QE wasn't about supporting the system or the wealth effect, but (gasp!)was about padding the accounts ot the uber rich before the biggest collapse in history?
Silly rabbits, believing whatever the FED says as gospel truth.
FED induced rally, FED induced crash, just like 1929.
Moar printing will fix this problem. On another note, halfway through my day and not one ebola story. WTF?
This isn't "new," but maybe you missed it:
Experts: Ebola Vaccine At Least 50 White People AwayDoc,
We're too close to the elections so everything has gone off the radar. Ukraine, Syria, Iraq, Ebola, Ferguson, ISIS, Bokem Harum, Afghanistan, ...
Its like Valerie hit the MSM quiet button......
Good point. Expect more prime time features on Obola and Sasquatch.
Was having similar dour thoughts this morning... I think what it's gonna be is a 'lull' and then one morning we're going to wake up to a news story of like 50 confirmed cases in 10 cities all over the U.S. One could let their imagination run wild with that.
I'm sure right after the election.
With mortgage rates near historic lows you would think 'demand' would be soaring.
<Time for the banks to pay us to become a slave to home ownership.>
Housing is too expensive. Period.
Even with rates at 0%, the downpayment is beyond the reach of many
I know people with perfect credit scores, own their own house outright, have no debt and cannot qualify for a home loan.
It's all about income now, not just "assets". One has to show 2 years of income that would generally equate to a 30% debt to income ratio. All debt is now counted, no "stated income" allowed (which puts the typical entrepreneur out of the market), and fixed assets are not part of the equation. So... very few will qualify for a home loan under any circumstances. Certainly not me!
I just got another VISA card with a $7500 limit. That brings my total revolving credit to enough to buy a nice car.
The funny thing is, with the new mortgage regulations, my FICO score isn't good enough to get a mortgage.
I think you need a job that pays well enough to afford a home mortgage.
At least, you used to.
I don't have a job. But I still have a business of record and never filed bankruptcy.
I just got a new card with cash-back rewards. I feel guilty about NOT spending.
No way! You mean the one peddled by Laurence Fishbum on tv? That is like free money on everyday purchases. Where can I sign up?
It's cool though - as long as you're 'In the System' - of $$$Debt, there is no problem. Now get out there and $$$support the $$$system...
keep collecting cards till you get a nice 6-fig number, find a decent job overseas, then leave and swipe them all for cash. credit scores dont follow you and it's enough cash to start a new life. bonus points if you call and report the cards stolen, lol.
Buy about 300 ounces of silver with it, cut it to pieces and throw it away.
;-)
I have thought about this scenario. We need a post on how to most effectively screw banks, as they effectively screw (or attempt to screw) us daily!
Tyler...set that shit up men...we need a fucking the banks forum.
RIPS
Do you mean with or without fraud charges?
Make a few minimum payments to show that you tried to pay in good faith. There's no fraud then.
Still fraud, just more difficult to prove...
Agreed, fucking the banks forum using thier own programs or systems is an excellent idea.
Mortgage applications are down because everyone is rich and paying cash.
Who needs a house these days? We need hotels, restaurants, pubs and swimming pools since the planet is our home.
This is good news against the fraud.
They are building over 10,000 apartments in Denver right now..and more onthe way...25,000 more....no one is moving anymore..staying put....
Housing is too expensive that no matter how low the interest rate goes. Homes in my area have gone up by about 200-300k in the past 2-3 years.
That is another 60K downpayment... And with Wage Increases going through the roof.... oh wait.
A Nation turns its lonely eyes to NINJA* loans ...
*last go round they kept the can rolling a bit longer by offering No Income No Job No Asset loans ... not making this up
I think Dodd/Frank expressley prohibits this. I don't think there is anyway to restart upward moentum this RE cycle. Look out below in 2015...
Might as well add owning a house to the list of things that middle-class Americans can't afford anymore... Let's hope the bankers go Mad Max on each other fighting for the scraps...
housing is way overpriced
watched a great interview before last recession
OBVIOUS housing bubble ... but "experts" were clueless. Negative amortization loans were all the rage too ... and "experts" thought nothing wrong with them.
Well, an interviewer found a really old salt who grew up during the depression ... living in a cabin and didn't finish high school ... and explained what negative amortization was
Old Salt: "That is the stupidest thing i've ever heard"
the rest was history
What these expert gurus don't understand is that the median income for Americans is $29,000 a year.
These expert gurus make $29,000 just for their 10 minute appearance on the show, so they are totally out of touch.
A house built in the mid 20th Century falling apart in need of constant up keep should be in the $50,000 to $60,000 range is instead going for $180,000 which is totally bonkers.
The Median Joe making $29,000 can't afford the downpayment, can't afford the monthly mortgage rate because he is "priced out", and can't afford the renovations to make the house livable because that requires yet another loan. The house flippers that have the house up for sale replaced a kitchen faucet and painted the walls, doing absolutely nothing to the structural integrity. They magically doubled the home's FRN value without doing real work.
The economy sucks for every one I know personally because of their monthly rent and monthly mortgage. If they had lower monthly rates, they would go out and spend that extra money buying goods and services from your small businesses, and in turn you would hire more people to expand. Instead Real Estate is the big sucking sound taking whole paychecks away.
Yeah Obamacare sucks, and all kinds of taxes suck, but the elephant in the room on most peoples' household budgets is their monthly rent/mortgage. The said expert gurus claim 30% of your budget, but with the current market insanity bubble rates, 50% is more realistic to get a roof over one's head.
Just do what GS does- turn the chart upside down and VOILA!! Problem solved
Mel Watt needs to fire up the 3% (er, 1% not far off?) down machine real quick ... so the US taxpayer can eat another sh!t sandwich
My mom bought her last house in 1990. So, it is her housing market.
Looks like the Fed has a LOT of hands to hold when they stop QE!
LOL
The explanation on the low number of applicants is easily explainable. All those buying homes are paying cash, even the middle-class 20 year olds are. So QE worked and has trickled down to Main St., how else would one be able to explain NAR's sales reports vs the MBA's reported numbers.
If you study chart 3 (transmission broken) then it would imply that rates will most likely fall to the mortgage activity line, not the reverse.
Not that simple. Mortgage rates are coupled to the 10 yr note. The 2 rates move in tandem.
The VP of lending at my local bank has been calling me twice a month trying to sell me some "money". I've been blowing him off, not answering, but starting to feel bad for the guy.
in other news: incomes go down for everyone but crooked bankers and Washington elite.
Captain, engine one is on fire.. Captain, Engine two is stalled..Captain...shut the fuck up Co-pilot
Graphs and statistics?
We don't need no stinkin' graphs and statistics. We are the
ruling 'elite' and we make shit up as we go along. Only the little people look at graphs, and statistics, and only the
little people pay taxes too. Hell, if the trend to purchase is down we will lower gas prices across the country until the dupes think the economy is working well again and decide to approach the banksters for another subprime mortgage. Too-BIG-to-FAIL is never too big to be in denial. Rich people don't work, pay taxes, or purchase subprime loans, ever. Only the little people purchase subprime loans, pay taxes, and work for a living. If you want to destroy the lives of the one per cent just eliminate their base from the bottom up. All Ponzi schemes require new investors or the Ponzi soon breaks down. Financialization
is a Ponzi that broke down almost seven years ago. And denial has a shelf life IMHO.
Housing way overpriced here in SoCal! $600,000 gets you a house next door to a drug dealer on one side and a welfare person on the other side. This cannot possibly sustain itself. There needs to be a correction.
The fuck are you smoking? The drug dealer is likely on welfare too... This is how you live high on the hog... social safety net + cash work.
Meh, I'm slowly building my little crib. No bank(s) involved. No financing needed. It takes time but it can be done.
Whenever I read housing news like this, I am always left wondering, "Just what were they thinking was going to happen? How many houses do people really need to buy?" If you keep selling 400,000 houses a quarter into a nation that barely has a pulse as far as population growth is concerned (and this despite massive immigration), then you're going to sop up the pool of solvent buyers pretty darn quick. Given prevailing demographic conditions, there is just no way that housing can be a growth industry without massive financialization and price inflation.
We can have plenty of growth in a normal economy. But we can't have the kind of revved-up, super-speed growth that THEY need.
We can provide for our own needs through normal growth. What we can't afford is THEM. It isn't all of us "living way beyond our means"...it's THEM, and their skim, that is causing the shortfalls.
A society that cries poverty when it comes to taking care of its poor, or taking care of its returning soldiers, can't afford super-wealthy folks either.
Maybe Hillary will have second thoughts...it's starting to look like whoever wins in 2016 is gonna have a hell of a time, and not in a good way. A lot of shit is starting to converge, and whoever is in the White House is gonna get it full in the chest.
Might sound exciting for a younger person, but she's looking at 80 soon.
Come to think of it, this has got to be occurring to the potential GOP candidates too...something bad is coming, it can't be stopped, and whoever happens to be in office when it does is toast.
With HRH Hillary! it doesn't appear as though the coming hell has any bearing on wanting this job. Frankly, why would anyone want this job? You age quickly, everyone blames you. You can't get anything done. It's thankless just like customer service.
The 80 factor has been lifted tucked and lightened. She looks great./s/
The die has already been cast I feel. Jeb v. Hillary.
Out of a 200 plus million nation is this the best we can do?
She is an insane Harridan. God help us from another serving of the finger-wagging nanny fascists.
Grifter.
Read William Faulkner.
She still has to be nominated. Last time that didn't go so well for her.
For the Nation's sake, I hope she has second thoughts.
Or if she runs, the Dems refuse to nominate her.
On the other hand, I can't really think of anyone serving in Congress or as Governor anywhere who is up to the job right now. It will be worse in 2017 when (s)he takes office. Maybe we are electing the "Last President of the United States?"
Craig
job???--what job???--the only "job" anyone in government seems to have that they lift a finger to perform is fundraising.
my old hometown used to be a nice little place to live. honestly, it still is, but as far as jobs go? not really much. anything "downtown" is over $1m now, an easy 400k for anything outside of that. of course, that's all paper value, seeing as nothing actually moves apart from when a place with a decent lot goes on the market.... so it can be torn down and turned into 3 mcmansions at 700k+ that... of course no one actually ever buys.
the real problem here is that to get those low rates, you have to have a downpayment.... which no one actually has anymore. and those that are "smart" (ie, not fucking retarded) with their finances know it's a fucking bubble and want no part in it till it all implodes again.
The popping of this latest bubble will be something to behold. The stream of Mainlander $$ out of the People's Republic of China has to end sometime. That's why the Seattle and San Francisco RE markets are major canaries in this particular coal mine.
I have been fighting with my (admittedly greedy) PRC wife to not buy Bay Area RRE, for the past year. All her idiot friends are doing it. They have bought homes in Mamboland in Richmond online, sight unseen, from their terminals in Beijing. Breathless Greed and Idiocy and a major bubble. All imvho.
But may the Fed turn to shit for promoting the demise of this country.
This is great news. Solid recovery. Everybody paying cash for $500K drywall slop.
Figuring this one out is hardly Rocket Science.
Who the hell is gonna buy a house if they have no job security, can barely afford to live month-to-month, or even THINK about buying that over-priced and old piece of shit when there are plenty of new, over-priced, pieces of shit on the market?
Why the 30 hour a week jobholders with the $45,000 student loans, of course!
Something funny is happening. I've been in negotiations with BAC to end the five year+ journey of my inherited foreclosure, but I have not heard back from them in two weeks since I requested changes in our "cash for keys" settlement.
I was thinking that maybe they were trying to screw me, making me wait until my time deadline expired on responding to their motion for summary judgment, but the court clerk told me yesterday that there was a one-month adjournment that both parties had agreed to, so I'm trusting her word.
The only other possibilities I can think of are:
1. They don't like the changes to the settlement agreement, since I wanted certain protections like the ones they put in for themselves.
2. They are awaiting the end of QE, knowing a crash is coming, knowing that they are completely bankrupt and that signing any agreement to "re-acquire" real estate would be foolhardy.
That's all I got. Waiting, moving in meantime. Maybe I'll end up with a free house anyhow and a new one that I'm moving into.
<s>It would really break my heart if BAC were to fall completely apart and the banks close down in a week or two. Maybe after the election? </s>
16 minutes until Fed announcement. Take your Dramamine NOW!
But "don't you want to sell your home" and refi organization junk mail is at 19 year highs so the glass is half full probably
Just drove through the neighborhood I lived in about 11 years back. Used to be real nice, only about 3% rentals, now over 20% are rentals in this 25 year old town home community. No money to keep up the common areas, and the units that have for sale signs also have signs on the doors that say they are "winterized", meaning don't flush the toilets or run the sinks: Guess they are not expecting a quick sale.
bought a tiny home (shed), 12x 16, having it moved on the property next month , after some changes (done all by me) I will have 10K in it.
Then i get to fill it with less stuff, i can hardly wait for it to be done. One way to beat the system..live life large and live small!