Mortgage Applications Decline 3%, Q1 GDP At 1.8%, Fed To The Rescue?

Confounded Interest ^ | 06/26/2013 | Anthony B. Sanders

[whitedog57]

As I discussed yesterday, rising Treasury and mortgage rates would likely lower refi applications and keep a lid on mortgage purchase applications. According to this morning’s report by the Mortgage Bankers Association, the Mortgage Refinance Index decreased 5 percent from the previous week to the lowest level since November 2011. The seasonally adjusted Purchase Index increased 2 percent from one week earlier.

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Since May 1st (Mayday!), Treasury and mortgage rates have been rising. But so have mortgage purchase applications (on average). But the rise in mortgage purchase applications is quite lackluster given the surge in house prices.

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But if we look at the historic trend in mortgage purchase applications, they are still at 1997 levels. You know, when the Clinton “Great Leap Forward” in homeownership began.

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Refis? The refinance share of mortgage activity decreased to 67 percent of total applications, the lowest level since July 2011, from 69 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7 percent of total applications. The government share of purchase applications dropped to 28 percent, the lowest level in the history of this series. The HARP share of refinance applications fell from 31 percent the prior week to 30 percent.

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Q1 Real GDP revision came out at 1.8%. Oogh! Not quite the 3%+ that we need.

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And the breakdown by sector:

GDP Q1_1

The 10 year Treasury yield dropped 7.4 basis points on the news.

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Q1 Real GDP growth at 1.8%? Declining mortgage applications (and weak growth in purchase applications)? Will The Fed come riding to the rescue like John Wayne in a John Ford western.

[whitedog57]

Here come da Fed!

[Be Free]

Now, what was it that was different in Q1 of this year vs. Q4 of last year, and that might explain the slowing of the economy. Hmmmm ... could it be the INCREASE IN TAX RATES?!?!

It’s almost as if people crammed everything they could into last year’s Q4, and went to sleep in this year’s Q1. Who’d have guessed!?!?!

[entropy12]

It is now proven beyond any shadow of doubt that printing money by the Fed or other central bankers does not stimulate the economy, consumer prosperity or corporate profits.

It is like giving enema from the wrong end. To stimulate prosperity, taxes and regulations must be reduced and encourage a strong currency. Fed & Obama are doing exactly the opposite.

[alloysteel]

For being some kind of “recovery”, this looks an awful lot like a full-blown DEPRESSION in disguise. The economy is being kept on life support only because of the continuing pumping up of numbers of dollars. The other component to the value of money, velocity, is missing, and seems to be slowing even faster than the supply is being pumped up.

The air is fast leaking out of this “recovery”.

[PoloSec]

Exactly:

Ya’ll get ready now...cus here come da Fed...da judge ain’t gonna wack their pee pee.