Posted on 01/11/2023 6:33:56 AM PST by Kaiser8408a
The US residential mortgage market seems to be born under a bad sign … and if it wasn’t for The Federal Reserve, it would have no luck at all.
It is the start of a new year and, like clockwork, residential mortgage applications are rising (at least until May). But it is important to realize that purchase mortgage demand is down 44% from the same week last year (YoY). And refinancing mortgage applications are down 86% YoY.
Mortgage applications increased 1.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 6, 2023.
The Refinance Index increased 5 percent from the previous week and was 86 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index increased 47 percent compared with the previous week and was 44 percent lower than the same week one year ago.
You can see the beginning of the new year in pink outline, purchase apps up 47% since the previous week (WoW). But you can see the general decline in both purchases and refinancing applications YoY as M2 Money growth stalls.
Talk about seasonality! If you want to feel optimistic about the mortgage market, just look at the first week of 2023. Declining mortgage rates are helping fuel short-term mortgage demand.
(Excerpt) Read more at confoundedinterest.net ...
Apps may be up during the first week of 2023 because newish small business owners now have two years of K-1s and they are rushing to lock in rates before the next hike.
We had a record year in 2021 leading into the beginning of 2022, due to money pushed into the economy and anticipation of higher rates. So, it is not a great time to compare. If it is still tanking six months from now that would be a better measure.
Someone suggested that the the fed controls the economy like someone driving in a winding dark tunnel with no headlights, jerking the steering wheel in the opposite direction when he hits something. It kind of works, but the car takes a beating and the driver gets jostled.
More good news, we are making progress.
Business is brisk in Atlanta. Our neighborhood is still selling pretty fast. We expect to get top dollar for our house when it th goes up for sale in a couple of months. We are in the low $300’s price range where no new houses are being built.
Part of your “sign” is going to Davos.
I knew a woman in the 70’s who had a mortgage at 17%. People with 8% and 9% mortgages felt lucky. This all depends on what direction you feel rates are going.
Meanwhile anywhere within 30 miles of NYC remains very expensive and inventory is low - there is no place to build but up and single family homes are no longer being built.
Same in Atlanta. Low inventory and everybody and their dog is moving here from Chicago and NY. Lots of cash sales going on here. No mortgage necessary.
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