Mortgage Approvals Up Again

[grumpy-old-man-returns]

iirc, you need approx 70,000-80,000 approvals a month to maintain the hpi equilibrium in the housing market.

[LondonToManchester]

AWOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOGA

Now watch all the bears do there Vicky Pollard expressions!!

YEA BUT NO BUT YEA BUT NO BUT

[HAMISH_MCTAVISH]

iirc, you need approx 70,000-80,000 approvals a month to maintain the hpi equilibrium in the housing market.

Not according to Spline.....

[Namaste]

Pray tell, how does this compare with the previous month & what's the source?

40,000 last month

43,000 this month

Hmm, rate slowing here a little. You need about 60,000 at the mo to stabalise prices. With peak buying season coming to an end, you bulls are running out of time. Was expecting a fair bit more than that (closer to 50,000, especially as, like you bulls keep saying, we're in a recovery.

[Sibley's Love Child]

Much appreciated Moosetea and Namaste; hardly reasons to be cheerful then? Akin to spunking a ton on scratchcards and getting a quid back. Happy days.

[AteMoose]

Actually, it was 55,000. But that number keeps falling. We'll see what it is when the graph is updated. It wouldn't surprise me in the least if the two lines cross at 48,000 or so. I suppose, theoretically, the graph could also be prone to a margin of error. As prices are now rising, the number could be 42,000.

As for approvals, I suspect those may well increase markedly over the next few months after the recent media coverage of prices rising. We'll see.

er... there is a lag between approvals and prices... Approvals LEAD prices by 3 to 6 months, prices cant (and aren't) rising until a couple of months after they breach the neutral approvals line. IMHO stick to facts not straws and you might get some respect. Yes I agree with the principle of your post, but you spin faster than tony blair (or an estate agent)!

Edited June 2, 2009 by moosetea

[HAMISH_MCTAVISH]

It keeps falling because house prices are falling. In the same paragraph you say house prices are rising, which would send the required mortgage approval rate up. So which is it? Are house prices falling or rising?

Oh, don't get me wrong, I do think this is a blip, of sorts. But I also think we are so close to the bottom, that whilst we will see further falls, they may well be within the margin of normal seasonal movements before a pronounced recovery early next year.

And I note you chose to ignore this part...... I suppose, theoretically, the graph could also be prone to a margin of error. As prices are now rising, the number could be 42,000.

Edited June 2, 2009 by HAMISH_MCTAVISH

[AteMoose]

I can't get my head around why this number of approvals for price stabilisation keeps falling, and is now 55k.

Other graphs on that site suggest 0% HPI YoY at around the 70-80k mark, based on historical data. So why is it now 55k, and why will this keep falling ?

Can some matchs genius help me out here ?

Spline explains the maths here (Kalman estimator?)

http://www.houseprices.uk.net/articles/hou...rice_predictor/

and includes a forward prediction of prices..

falls stop around spring 2010, no real recovery/flat price best buying time Late 2010 before spring 2011?

Edited June 2, 2009 by moosetea

[Akrasia]

Why do bulls feel the need to talk up mortgage approval rates, and bears feel the need to talk them down?

An increase in mortgage approvals suggests that prospective buyers are making offers, sellers are accepting them, and lenders are willing to fund the resulting purchases. That supports the idea that the stand-off is coming to an end, but it says nothing about the crash being over.

It may be that mortgage approvals are rising because buyers have capitulated.

[Bloo Loo]

Why do bulls feel the need to talk up mortgage approval rates, and bears feel the need to talk them down?

An increase in mortgage approvals suggests that prospective buyers are making offers, sellers are accepting them, and lenders are willing to fund the resulting purchases. That supports the idea that the stand-off is coming to an end, but it says nothing about the crash being over.

It may be that mortgage approvals are rising because buyers have capitulated.

they like winding people up...ignore them, do not feed them.

[HAMISH_MCTAVISH]

Mortgage approvals up to 42,000, 3rd monthly rise in a row.

[Sibley's Love Child]

Mortgage approvals up to 42,000, 3rd monthly rise in a row.

Pray tell, how does this compare with the previous month & what's the source?

[the end is a bit nigher]

Why do Bulls not understand that lenders are approving more because prices are lower? Which bit of this can't they understand? Increased volume on lower prices.

To reiterate just how simple it is:

Person with £40k salary applies for loan for £240k to buy £280k house. £40k deposit, 6 times salary. Lender says no.

Person with £40k salary applies for loan for £180k to buy same house for £220k. £40k deposit, 4.5 times salary. Lender says yes.

Hence the lower price has led to a request for a lower loan amount, resulting in a higher loan to value, resulting in an approval.

IT ISN'T DIFFICULT TO UNDERSTAND!!!!

Anyway, the good news for the Bulls is that if you believe Spline's charts then after this month's update the chart should show that the number of approvals required for price stability has been reached.

[Bloo Loo]

Is it a boom?

Is it a Pain?

No its PeakbuyingseasonMan!

SUPERHAME.

[the primitive]

Mortgage approvals up to 42,000, 3rd monthly rise in a row.

Wow that's only 65% down on peak.

Twunt

[LuckyOne]

Mortgage approvals up to 42,000, 3rd monthly rise in a row.

My favourite factiod comes from California. Prices in 2008 were 37% lower than they were in 2007 yet the total dollar value of sales in 2008 was higher than it was in 2007. Prices in California in 2009 are still falling from 2008 levels despite the rising numbers of transactions.

[sbn]

That's pretty much it now isn't it Hamish?

You see that little blip in the drop off the cliff??

That was your spring bounce combined with the bull trap that was!!

One of which you still have to wait another year for

The other isn't happening again - it was a one-off!

Edited June 2, 2009 by sbn

[AteMoose]

Pray tell, how does this compare with the previous month & what's the source?

It is the Bank of England Mortage Approvals

http://uk.reuters.com/article/domesticNews...E5511SD20090602

data is available from BOE Website, but they dont make it easy as it needs to be spliced together

http://www.bankofengland.co.uk/statistics/li/2009.htm

Ive spliced the data back to 2009 below and attached it

Or you can get it from splines excellent website http://www.houseprices.uk.net/articles/pro...y_transactions/

@OP : Why not post all the hard facts and links? Rather than making other posters do all the hard work?

BOOTNOTE : We need about 55k approvals a month to stop the declines, IMHO we will achieve this in 3 to 4 months (or perhaps longer as we see a decline in interest after the spring), with this taking 6 months to feed through to the property sales value. (This means we have at least 9 more months of falls. IMHO flat market/slow falls/higher general inflation? next spring.

Edited June 2, 2009 by moosetea

[The McGlashan]

Is the unremarkable uptick in approvals worth posting?

Not when we consider the ratio of sales to unsold housing stock, which remains at a historic low.

Edited June 2, 2009 by The McGlashan

[Rinoa]

40,000 last month

43,000 this month

Hmm, rate slowing here a little. You need about 60,000 at the mo to stabalise prices. With peak buying season coming to an end, you bulls are running out of time. Was expecting a fair bit more than that (closer to 50,000, especially as, like you bulls keep saying, we're in a recovery.

They are seasonally adjusted.

Maybe they were 50k ~ but the SA pegged them back.

[Number79]

approvals are slightly up but looking at the figures properly the average sale price is somewhere around £115k which means that prices are still falling.

I think that as long as prices continue to fall then so long as mortgages are available then there will be an increase in buyers believing they are getting a good deal. Although such a marginal increase of approvals does highlight that the majority are not believing it and there are fewer suckers left than required.

[HAMISH_MCTAVISH]

You need about 60,000 at the mo to stabalise prices.

Actually, it was 55,000. But that number keeps falling. We'll see what it is when the graph is updated. It wouldn't surprise me in the least if the two lines cross at 48,000 or so. I suppose, theoretically, the graph could also be prone to a margin of error. As prices are now rising, the number could be 42,000.

As for approvals, I suspect those may well increase markedly over the next few months after the recent media coverage of prices rising. We'll see.

[Namaste]

They are seasonally adjusted.

Maybe they were 50k ~ but the SA pegged them back.

Arguing over seasonal adjustment again. The fact they're seasonally adjusted down just confirms that this so called 'recovery' is non existent as it doesn't even live up to previous Spring bounces. Admit it, you was expected much more than this this month. Wonder what the next set of home sales stats will tell us.

[Namaste]

Actually, it was 55,000. But that number keeps falling. We'll see what it is when the graph is updated. It wouldn't surprise me in the least if the two lines cross at 48,000 or so. I suppose, theoretically, the graph could also be prone to a margin of error. As prices are now rising, the number could be 42,000.

As for approvals, I suspect those may well increase markedly over the next few months after the recent media coverage of prices rising. We'll see.

It keeps falling because house prices are falling. In the same paragraph you say house prices are rising, which would send the required mortgage approval rate up. So which is it? Are house prices falling or rising?

[Shunnyonions]

Actually, it was 55,000. But that number keeps falling. We'll see what it is when the graph is updated. It wouldn't surprise me in the least if the two lines cross at 48,000 or so. I suppose, theoretically, the graph could also be prone to a margin of error. As prices are now rising, the number could be 42,000.

As for approvals, I suspect those may well increase markedly over the next few months after the recent media coverage of prices rising. We'll see.

I can't get my head around why this number of approvals for price stabilisation keeps falling, and is now 55k.

Other graphs on that site suggest 0% HPI YoY at around the 70-80k mark, based on historical data. So why is it now 55k, and why will this keep falling ?

Can some matchs genius help me out here ?