Perfect Storm? Bernanke, Housing Starts and Mortgage Purchase Applications

Confounded Interest ^ | 07/17/2013 | Anthony B. Sanders

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U.S. housing starts unexpectedly fell in June to the lowest level in almost a year.

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Mortgage applications dropped 2.61% from the preceding week. However, mortgage PURCHASE applications actually rose slightly 0.5%.

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And as you can see, the Bankrate 30 year fixed-rate average mortgage rate fell last week.

Over the long term, we are still stuck at purchase application levels from the mid 1990s.

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Of course, median household income in real terms has been falling which doesn’t bode well for the size of the pool of good quality borrowers.

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Mortgage refinancing fell 4.19% from the preceding week despite falling mortgage rates.

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Average loan size? It actually fell 1.63% for the preceding week.

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What will happen to Treasury and mortgage rates? Here is the text of Bernanke’s speech in the House of Representatives. Before BErnanke’s Q&A, the US Treasury 10 year yield dropped 6.7 basis points.

Sty tuned!

[whitedog57]

An un-elected official (Bernanke) is the most powerful person in the world. Scary.