Mortgage Applications Plunge As Rate-Hike Craters Refis

Tyler Durden's picture

Who could have seen this coming? US mortage applications tumbled 7.4% in the prior week - the biggest drop since 2016 - as mortgage rates rose to two-month highs following the Fed's rate-hike and hawkish jawboning.

The big driver was refis which fell 13% WoW and a stunning 57% year-over-year - the biggest plunge since the taper tantrum.

All data above adjusted for July 4th holiday.

Still - probably good to keep up the normalization - because extreme high home prices, stagnant wages, and soaring rates will help underpin our 'strong' recovery.

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mpcascio's picture

It's all in the plan to destroy any chance of Trump's success. It's not going to work.

NugginFuts's picture

Or maybe it's the inevitable result of bad Fed policy designed to destroy the middle class? 

Ramesees's picture

Given the number of $2.5mm houses going up in my parents' neighborhood in their New South city, the builders had better hope that yields come back down.  Not that many people laying out $2.5 in cash in my parents' city.

Bill of Rights's picture

Ya those 4% mortgage rates are a real deterrent lmao!!! They make it sound as if rates are in the sixes or nines lol you Can't make this shit up even if you Tried!

Never One Roach's picture

Americans are broke donkeys and many who actually can afford the meager mortgage rates (with zero down) don't want a house. Then there's Obamacare taxes and penalties and sky high premiums and deductibles that's crushing both Republicans and Democrat middle class people while the Dems block any fixes.

It's definitely NOT the "high" mortgage rate causing any housing slump.

Bill of Rights's picture

Key word while the Dems block
Any fixes....

Funny part is these assholes think what they are doing will win them elections lol this place will burn before another progressive democrat get elected ever again...

man from glad's picture

Yep. And another 1/4 will kill the markets and economy. Shoot, family bought a house in early 1970's and the rate was 7%. I think 4% is about as good as it gets.

Ramesees's picture

Problem is wage inflation hasn't yet started to move through the system (if it ever does).  People would pay higher interest rates if they thought they were bound to make more money next year.  

warpigs's picture

Bingo. I write these deals. What hysteria :) Tons of people have rates high enough to warrant a refinance, still. They just do not take action. Rates are solidly low right now, by any historical measure. What a joke.

Ban KKiller's picture

Those getting refis  are working in state jobs. Not many who haven't sucked up to Wells Fargo. Ha ha ha ha. 

Banksters are firmly in control, don't worry. The millennial generation is horrible at working in title companies as they don't understand the fraud...great!

spastic_colon's picture

apparently they have worked off all those "unsold" homes from all those off balance sheet entities..............because demand lol.......todays home buyers are suckerz

CHoward's picture

If you can't afford a 4% fix mortgage rate - YOU CAN'T AFFORD TO BUY A HOME!!!!!

Totally_Disillusioned's picture

rates in the high 3% are still available.  This is click bait.

rejected's picture

In the 1980's we paid anywhere from 9-14%. Home 'ownership' *  was greater than then now.

(*) In reality, no one with a mortgage, "Owns a home"

Okienomics's picture

After so many years of suppressed interest rates, who has anything left to refi?  And mortgage applications are declining due to all-cash buyers.  In our neighborhood, half or more of the homes being sold (at crazy high prices) are going to people who don't speak english with passports from PRC.  They're not buying in person, but through local agents.  They are not spiffing up the neighborhood and they're not moving in.  What they are doing is driving property valuations up with the local Appraisal Review Board (our fine fellow citizens who keep jacking up property taxes).

Youri Carma's picture


Banks raised mortgage rates 28 times already this month: is this a turning point?
(Google trans from Dutch)

ORG: 28 keer verhoogden banken al hypotheekrentes deze maand: is de kentering daar?

comob's picture

Still - probably good to keep up the HYPERnormalization - because extreme high home prices, stagnant wages, and soaring rates will help underpin our 'strong' recovery.


Fixed that for ya! - Courtesy of the Broken Overton Window Theory 


onthedeschutes's picture

"soaring rates"...Nice try, Tyler.  Please spare us these stupid comments.  We have CNN for stupid commentary.  

XAU XAG's picture


Tyler must be young? LOL

When I was in the market 25 years ago


30K house ment a 300 Mortgage P/M

40K house ment a 400 Mortgage P/M


The market would crumble if rates normal


Especially with all the num nuts on INTEREST ONLY MORTGAGE




If a 30K house with a 300 P/M payments rental value of 200 I would put 10K down so I could cover my arse if it went tit's up


Now no one gives a shit........."RENT A LIFE" I CALL IT 



jughead's picture

rates? we don't need no stinkin rates, we pay cash! 

silverer's picture

Hey America! Looks like the robots beat you to the house. Maybe if you work for free, some elitist will gift you a house. After all, didn't you expect to get all the government you paid for?

XAU XAG's picture

And it's gone




Due to lack of available spare income



Herdee's picture

Makes you wonder if there's not a plan from within to destroy the United States.

Grandad Grumps's picture

On the one hand,having a debt-free money system would be a good thing. On the other hand, if the money is only debt-free to the banks (and presumably their criminal cronies and the governments that provide the protection racket) and the money is not debt-free to the people who cannot create money on their own, then it is just another scam.

Interest rates are ultimately meaningless if the system is unfair. And, no, providing free money to banks and cronies is not a Julbilee. It is a mockery of God.

HalEPeno's picture

The refi drop makes sense.  If you already are at between 4.5 and 5.5(which a lot of people are) a refi is of marginal utility. Especially if you don't expect to own your current house for less than ten years, which many don't.

Consuelo's picture



Amazing what has been built upon the back of Mortgage financing.    Which is a not-so-subtle reminder as to why all this talk of raising rates (to anything approaching normal) is nonsensical on its face.   And why the $prudent will continue to be marginalized until the entire rotten edifice implodes upon itself.   All what remains is the trigger to get it underway.  

bornlastnight's picture

When I bought a house in 1995 my rate was 7%.  After 2 refis to get the rate down to 3.5%, I paid off the house in 2014.

Now just me and the city tax office own it.

goldenbuddha454's picture

Sorry, but there are no refis because everyone is selling their homes at a profit.  Anecdotally, if you live within any metro area now existing housing for sale must be going up because within 1 wk most houses have an offer unless they are materially defective .  BTW, I'm not a bull.  I know this is all FED-juiced, but I look in the mls for houses because we are shopping and in a matter of days the inventory flies off the shelf.  For what its worth, if I had one to sell I'd sell it too instead of REFI.