Mortgage Applications Crash 30% As Borrowing Rates Surge

Tyler Durden's picture

Dear Janet...

In the last few months, as The Fed has jawboned a rate hike into markets, mortgage applications in America have collapsed 30% to 10-month lows - plunging over 9% in the last week as mortgage rates approach 4.00%.


We suspect the divergent surge in homebuilders is overdone...

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Son of Loki's picture

I am looking forward to 7% or more savings yield. Maybe I can retire some day. Will bernie mention this on his "book tour"?


In the wake of Trump's win, a Bernie Sanders book tour becomes group therapy

I saw Hillary is now blaming Bernie for her loss.

Budd aka Sidewinder's picture

AAA munis so you don't pay Uncle Sam either

City of Dallas would be a great start LOL

saveUSsavers's picture

I thot Dallas had a pension crisis brewg

markitect's picture

Everyone has a pension crisis brewing.  Some cities and states are just closer to the end point than others.  Generally the older NE states are further along than the sunbelt but they all are heading down the same path.

SomethingSomethingDarkSide's picture

Nah, I should totally slam 3% down on a piece of shit McMansion!

$3 mil now and $8 mil over the course of the loan?

Why not?!

What does 'Underwater' mean?

RU4Au's picture

I'm calling BS on the graphics. Look at Mortgage Applications in the top graph. December '15 looks just like where December '16 is headed. Seasonality?

lasvegaspersona's picture

Another industry dependent upon interest rates is insurance. They need regular income to fund expenses and profits. At NIRP they are hurting. State Farm has raised my auto rates with no explanation (perfect record and multiple lines with them).

I believe they must be doing very poorly because there is not another explanation for this behavior...State Farm used to be tops....

Boris Badenov's picture

It's because they don't earn interest anymore on the money while it sits before it's paid out. Also because people are having not more, but more expensive accidents. 

Whole Life cash balances have hit their interest rate bottoms, usually 4%, and that is higher that what companies can earn so they are losing money on that. But that should not affect your auto rates since they must be held separate. All auto companies are in the same boat.

Another thing that may affect your rates is the NHTSA Safety Rating of your vehicle. Your car may have started out with a high rating when it was new, but as improvements have been made with each model year since, it's possible that your rating is lower now when compared to new models of the same make and model.

glenlloyd's picture

Hillary is blaming anyone except Hillary, and if there's anyone to blame it was Hillary.

Non-market interest rates should be against the law anyway, let the market determine what the value of money is. As it is now we have bureaucrats deciding what you use to pay for things is worth. And further it lets people who have no idea what the value of money should be decide what your wealth is worth. A really bad idea.

Besides, they had to know that these false low rates couldn't go on forever...didn't they? I mean come on people...wake the fuck up!!!

silverer's picture

As I've posted elsewhere, you don't have to borrow your money from a bank.

froze25's picture

If your talking about hard money, that is going for about 12% these days.

Dig Deeper1's picture

You want to make 14 dollars the hard way? -A.Czervik

froze25's picture

This is not meant to be sexist but in my experience women very rarely if ever will hold them selves accountable for their own action. In this example its Hillary admitting that ultimately she was in charge of her campaign and she is responsible for the win or the lose. If she should of fired someone that didn't preform that is on her, if she should of done more campaign stops, that is on her. She only needs to look into the mirror to see why she lost. Sames goes for everyone else that complains that they aren't doing well in life because of some external force working against them. We aren't slaves yet and we do have choices on how we approach life and how we use our available time.

CheapBastard's picture

Pedopodesta has been scarce recently.

However, I am waiting for the upcoming Jerry Springer show guest starring:

1) Hillary;

2) Bernie;

3) Soweto;

4) Pedopodesta;

5) Mr Khan; and,

6) crooked Comey.


They can all fight it out up there on stage. Thera-puppies have been ordered for the show and the audience with a handful of pysc counselors for those sensitve members who can't stand the truth.

The Fly will make a special appearance and promises to land on at one evil doer.


skipjack's picture

Oh ffs - has Obama every taken responsibility for any of HIS failures ?


Don't be a moron.

Global Hunter's picture

No he is a homo bitch and that makes him closer to a woman in temperament

Mr. Pain's picture

At least we don't have to look at the old dirt bag Hitlery for four years!


Consuelo's picture



Can you imagine that - getting an actual return on your savings...?


Remember when parents would take kids down to the local WF to open a 'passbook' savings account at an absolute paltry 5.25%...?   It was thought of as an initiation of sorts - a character-building exercise.   The grown-ups were pulling down well north of 5% of course.    A man saved first, and spent later.   Capital was for people with ideas and a plan.   


Fuck me - this shitshow is gonna go down so spectacularly as to be quite the numbing event, for an already numb-nut society.





froze25's picture

I had one of those "Pass Book" accounts when I was very young, till out of HS.

Mr. Universe's picture

I think it was part of buying into the the lie of "fiat" money. Pass book savings? Never. It was always an unsecured loan to an institution that uses your dollars to create even more "fractional reserve" dollars in order to do it all again. You were paid a small percentage, but as an unsecured creditor, you are last on the list to get paid back in case of default. Our Great Grand and Grand parents lived through the depression and saw the effects of multiple bank failures, pre bail out, it wasn't pretty. The whole idea is a lie. If he were still alive you could ask my grandpa why he hid everything is a false panel behind the stove. The answer would be something like this "because I don't trust the dirty buggers."

TheABaum's picture

Hard to imagine.. been so long.

I had tax clients that used to be able to get by with $200,000 in the bank, would make 8K @ 4%... with SS and a modest pension.

Now, they hurt.


I tell them they are contributing to the "recovery". They aren't gladdened.




ejmoosa's picture

I'll be a helluva lot more excited when I see lousy businesses see their stock falling.  

TheABaum's picture

BS Bernie selling books? What kind of capitalist pig exploit is this?

markl's picture

Democrats. It's never their fault, always someone else's.


Soul Glow's picture

It's ok, China will buy all of the mortgages, right Silicon Valley?

LawsofPhysics's picture

That language always cracks me up.  Basically "we will be exchanging paper that nobody wants for more paper that nobody wants"

"Full faith and credit"...

tick tock motherfuckers.

TheABaum's picture

What could go wrong. NINJA mortgages are like gold, only better, right?

DogeCoin's picture

I hope to God this housing bubble is done. I'm so fucking damn tired of hearing "housing prices can only up" and "it's different this time, the government and the Chinese speculators will support it forever."

Son of Loki's picture

If I hear, "Don't be priced out" one more time I'll croak!

Lost in translation's picture

I've already croaked ahead of you.

They tell me I voted for Hillary several times, but I was unaware...

pods's picture

I will be happy when HGTV hits the shits and that fake ass blond flipper wife has to earn a paycheck on the pole or on her knees.

And enough of the "This is a great price" for a 1500 sq ft dump with water view from the upstairs toilet room for a low low price of $850,000.


froze25's picture

I hear ya man, I try to tell people that having Home prices out pace wage increases by something like 7+% a year for the last what now 3 decades is insane and cannot be sustained.

CheapBastard's picture

All these people who overpaid Big Time for their houses are going to be screaming murder. However, the reality is RE is cyclical (usually shorter cycles then now) when not manipulated like Bernanke and Yellen have been doing for years.

The correction is inevitable and will be painful for some but they can't say they were not warned.

sopko16's picture

Yeah... In the meantime, it SUCKS for the rest of us. Especially if you can correctly value a house and REFUSE to pay that much over costs of materials and labor. However, they keep propping it up! It needs to pop! In the meantime, I've been getting killed on rent as I fight this.

It is like that other article about autos said: eventually the funny money forces everyone to need to act irresponsibly when it drives the price up on everything (like housing). I hope it is inevitable because I've been waiting! Man.

When the title said paging Janet Yellen because rates are going up to 4%, I wanted to punch someone in the face... just let the market go already! - equity, real estate, etc...!

hongdo's picture

Too true.  I got out of RE in 2006 when I asked the question "How many people can really afore a $1M house?"  The last place we sold lost $20K the week after we sold it.  At the closing I told my wife that giving a $2K tip in addition to the commission to her broker in front of the buyer was poor form. ( But in reality it was worth it.)

AceTen's picture

 Sold a home in fort Lauderdale for 700,000 in 2006 that home is now worth 300,000 

King Tut's picture
King Tut (not verified) DogeCoin Nov 16, 2016 12:54 PM

I just saw a local real estate agent tooling around town in her new 750iL

TheABaum's picture

Hope she can munch on it when the SHTF.

ItsyBitsy90's picture

My former agent keeps calling me every 3-4 months "just to check in".....spare me..

Kirk2NCC1701's picture

Re DogeCoin: "...I'm so damn tired of hearing 'House prices can only go up'."

Yes. I feel the same way about Gold and Silver.

(Oops, did I just cause Cognitive Dissonance here? Or can ppl here indeed "handle the truth", when it strikes close to home?)

hongdo's picture

Gold doesn't go up or down.  It retains buying power, less premium.

Lost in translation's picture

It's all Trump's fault!


Just getting myself mentally ready for the next four years of shrill wailing by the idiot-spawn all living off of their FAFSA gifts...


Pareto's picture

+100 Fuck no kidding.  It will be Trump's faults FOREVER.  "waaa waaa waaa - its all Trump's fault!!"

Dave5150's picture

George W. Bush was reportedly extremely happy that Trump was elected, because now the liberals/progressives on the looney left will now start saying, "It's Trump's fault!", and finally stop saying "It's Bush's fault!".

silverer's picture

Lol. Yeah, Bush gets a break. It gets old when people are blaming you for stuff that happened (or didn't happen) 10 years ago.

justin423's picture

LIke the Iraq war and Daesh?

Probably because he is still responsible. (Or Cheney was) 

TheABaum's picture

Waiting for Michelle to run with George P.

LawsofPhysics's picture

So what?  There are a shitload of dollars looking for real assets!!!

The Chinese are buying those homes and they do NOT need a mortgage, they are paying with cash.