For the 9th week of the last 10 mortgage applications fell (led by refis - down 55% from their peak). Now down an incredible 45% from its May highs - the largest 10-week plunge since December 2010 - overall mortgage activity is languishing around the lowest levels of the post-recession 'recovery'. Year-over-year, applications have dropped 44% which is close to the worst on record as applications and mortgage rates track one another in their 'whocouldanode' perfectly correlated manner. It seems - for all those blinkered pollyannas - given this morning starts and permits disaster [2], that home sales are the next shoe to drop and judging by the empirical relationship with apps and rates, the 'surprise' could be significant for many who remain hopeful.
Not pretty at all...
[3]
So it seems the Fed-induced "no we won't charge in and buy because we fear rising mortgage rates" behavior continues...
[4]
So are Sales the next shoe to drop?
[5]
Charts: Bloomberg