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U.s Mortgage Applications At Lowest Since 2000 As Rates Rise

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US mortgage applications fell last week to the lowest level since 2000, according to the Mortgage Bankers Association.

The MBA's seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 8.5% to 348.5 in the week ended February 21.

The index of loan requests for home purchases fell 3.5% to its lowest since 1995. Refinancing applications fell 11.4%.

"Purchase applications were little changed on an unadjusted basis last week, but this is the time of a year we would expect a significant pickup in purchase activity, and we are not yet seeing it," said Mike Fratantoni, the association's chief economist.

Analysts point to rising interest rates, rough winter weather and anxiety over the health of the US economy for the stalled recovery of the housing sector.

The interest rate on fixed 30-year mortgages averaged 4.53% last week compared to 4.50% the week before.

At the same time in 2013, 30-year rates hovered near 3.75%.

Earlier the week, Standard & Poor's reported that home price increases in major US metropolitan areas slowed in December compared to the previous month.

"The S&P/Case-Shiller Home Price Index ended its best year since 2005," said David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. "However, gains are slowing from month-to-month and the strongest part of the recovery in home values may be over."

The US Commerce Department will release the home-sales report at 10 a.m. Eastern. New home sales are seen declining for a third straight month in a row.

Also; link

The average number of mortgage applications dropped 8.5% on a seasonally adjusted basis as interest rates generally climbed from the prior week, the Mortgage Bankers Association said Wednesday.

Meanwhile, the seasonally adjusted purchase index fell 4% from a week earlier, hitting the lowest level since 1995.

All's not well. Weather to blame?

Will the trend cross the Atlantic, even with Gidiot's interventions?

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I was watching TV- a rare event- and what do you know,a HTB advert popped up runy by Halifax recommending the glories of a 95% mortgage.

I'd hope that mortgage applications in the UK will dry up,if only for the sake of the potential mortgagors.

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I was watching TV- a rare event- and what do you know,a HTB advert popped up runy by Halifax recommending the glories of a 95% mortgage.

I'd hope that mortgage applications in the UK will dry up,if only for the sake of the potential mortgagors.

Well, it kind of has done that already since 2008.

Gross lending figures show we're back to lending like it was 2002.

Even with massive cuts and token offerings to entice the market, the banks and economy are not stable enough to inflate any bubble here.

And when Carney/Gidiots HTB minions pass into their 5th year of mortgage and get whacked with repayments on the 'free loan' the real panic will begin for proles.

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It's against a backdrop of house prices that have been zooming higher and higher past 2 years, but maybe it's the crack-up.

I've got a secret dream, what perhaps keeps me somewhat sane, that the authorities are going to crash the market.... to allow opportunity of loads of new volume lending to younger people at much lower prices. All that equity-rich owned outright real estate at such high values not much use to banks if they've not got debt on it.

Rising Home Prices Crack Foundation of U.S. Real-Estate Recovery
Apr 23, 2014
...“A rise in interest rates, combined with the rise in home prices, has quickly and surprisingly made a lot of markets unaffordable for home buyers,” said Daren Blomquist, vice president at property-data firm RealtyTrac Inc. in Irvine, California.

http://www.bloomberg.com/news/2014-04-23/rising-home-prices-crack-foundation-of-u-s-real-estate-recovery.html

Price gains, driven by competition for a tight supply of listings, may be poised to slow as real estate becomes more expensive, more sellers list houses and homebuilders add to the supply of available properties. The average rate for a 30-year fixed mortgage has climbed by almost a percentage point from a year ago, further reducing affordability.
“We’re still seeing prices growing because inventory is tight,” Patrick Newport, an economist at IHS Global Insight in Lexington, Massachusetts, said in a telephone interview yesterday. “But going forward, we see year-over-year price growth slowly decelerating.”

http://www.bloomberg.com/news/2014-04-22/u-s-home-prices-rose-6-9-in-february-as-recovery-cools.html

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Even if rates have slipped back since, would-be buyers still have big obstacles to overcome in their quest for the mortgage.... especially in decent areas which are in bubble 2.0. (SoCal etc).

Banks soaked up lots of yield chasing savings/cash, that has been buying up housing, paying down outstanding mortgages in the banking sytem in the process, with US main banks sat on $2.5 Trillion of reserves... yet so cagey about lending... only if you have very good credit/deposit and look good for the debt going fowards (to the last of the mugs imo).

‘Scared’ lenders, declining affordability making mortgages tough to obtain
September 16, 2014

It’s possible for would-be home buyers to get a loan, but it sure has gotten harder, and that’s because of lenders who are scared of legal and financial risks, as well as declining affordability, experts said Tuesday at a housing-policy summit in Washington.

“Lenders are running scared,” said Paulina McGrath, president of Republic State Mortgage, a Houston-based mortgage banker. “You have lenders constantly having to look over their shoulders.”

In the wake of the housing and financial meltdowns, lenders created strict standards for who could get a mortgage. While there’s been some easing in access to loans, would-be borrowers still face high barriers to obtain a loan and some families who might typically considered creditworthy aren’t able to get credit.

in full..... http://blogs.marketwatch.com/capitolreport/2014/09/16/scared-lenders-declining-affordability-making-mortgages-tough-to-obtain/

September 16, 2014,
Lenders’ willingness to back mortgages for younger and older would-be borrowers is being cut by regulatory, legal and financial uncertainty, said Jonathan Smoke, chief economist for Realtor.com, the National Association of Realtors’s site.

This plays into my main UK HPC theory, coming to UK and even China. Crash the housing equity rich (with £Trillions in equity), then write volume mortgages on much lower low-to-high prime houses prices.

Too many people treating money/savings as the irrelevance, vs the glorious Assets they can buy today... at very high prices. (Their VI.. savings not earning anything in the bank, as Timak's parents-in-law not happy their 'dead money' of a few £100Ks not getting any real return in savings accounts... deciding to put it into property at really expensive prices... some of the reflation/supply issues/competition we have seen past year or so intensify.)

When actually savings set to become more valuable in purchasing power... tighter credit bodes well, for the coming HPC.

Everything is tightening up on credit scene, including with offset mortgages.

I can't recall where I read it, the other day, - in fact I think it was an article from a bank warning customers about restrictions/changes to their offset mortgages - but something about lenders not being so keen to allow you to draw back down on such mortgages, nowadays.

MMR and affordability checks.

CREDIT, CREDIT everywhere and not a pound to borrow… (except at higher rates or big LTVs, or with immaculate credit history and strong employment situation where individuals can't really afford to default on a jumbo mortgage.) :)

Debts are retired by paying them off, " restructuring" or default. In the first case, no value is lost; in the second, some value; in the third, all value. In desperately trying to raise cash to pay off loans, borrowers bring all kinds of assets to market, including stocks, bonds, commodities and real estate, causing their prices to plummet.

The process ends after the supply of credit falls to a level at which it is collateralised acceptably to the surviving creditors. Financial assets, and all other asset-classes of value, will be selectively repudiated by default, not obliterated by inflation.

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Precious precious capital, the ultimate of ultimates vs house prices at these levels.

Citi twice rejected by the Fed on moves to return capital back to investors. Fed wants big buffer (against low-high prime HPC imo, followed by glorious profitable lending on lower house prices...... dribs and drabs of mortgages at these house prices are not so profitable for the banks.... all that owner outright equity is the target to get debt on.) China again stacked its lenders with a lot of money recently, but I doubt it's going to be lent out. Eurozone stress test results on all major Euro banks taking place since early this year, with every indication tougher than ever before, with Chief Execs told the position either this Friday or next Friday.... the priority being enough capital / Tier 1.

Sept 15, 2014

Citi, Goldman Sachs, others release stress tests

Published: Sept 15, 2014

[..]For instance, Bank of America's latest adverse scenario features a U.S. economy with home prices declining 25%, compared with a 21% predicted drop a year ago. It also includes a 5.9% decline in Eurozone real GDP, compared with a 5% decline in the year-ago scenario.

Citigroup said that under its stress-test scenario, political tension would lead to sanctions against certain oil-exporting countries, which in turn would cause a severe recession in the parts of Europe that depend on trading with those countries.

..in full http://www.marketwatch.com/story/citi-goldman-sachs-others-release-stress-tests-2014-09-15

Edited by Venger

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Still scraping 2000 levels, but they really should qualify what 2000 levels were, vs boom years. Ahh found a source, below.

U.S. mortgage applications fall to lowest since Dec 2000: MBA

NEW YORK Wed Sep 10, 2014

(Reuters) - Applications for U.S. home mortgages fell last week to the lowest since December 2000 as interest rates rose for the first time in four weeks, an industry group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 7.2 percent in the week ended Sept. 5.

The MBA's seasonally adjusted index of refinancing applications dropped 10.7 percent to the lowest since November 2008, while the gauge of loan requests for home purchases, a leading indicator of home sales, fell 2.6 percent.

Fixed 30-year mortgage rates averaged 4.27 percent in the week, up from 4.25 percent the week before.

The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.

http://www.reuters.com/article/2014/09/10/us-usa-economy-mortgages-idUSKBN0H511P20140910
April 30, 2014
Last week, The Wall Street Journal reported that demand for home loans has also plunged to a 14-year low after mortgage rates spiked. This is the latest sign of how rising rates are holding back housing recovery as both homeowners and house hunters have showed little interest in new loans.

Rates are still quite low, although a tickup back to the 4.25% range recently, measured against other times, even if credit harder to obtain... it's the house prices being too high in decent areas, the problem, and debt revulsion from those who would like to buy. Guy from the Fed expects a bounce back in applications, but hopefully that is after a hpc.

Here, she recognises how bears read it, but suggests there could be some issues like holidays and stuff causing weaker application numbers.

Here’s a fresh factoid sure to gratify housing bears: A broad gauge of mortgage applications recently hit its lowest level in 14 years, according to data released Wednesday.

MW-CT817_MBA091_MG_20140910100920.jpg

Source / in full: http://blogs.marketwatch.com/capitolreport/2014/09/10/mortgage-gauge-hits-14-year-low-but-that-doesnt-mean-housing-is-dead/

What hints do we have from UK authortiy about situation here. Got to protect VI homeowning older voters? All those homes owned outright / equity rich of the older owners, special people. Perhaps not.

June 11, 2014
Broadbent identified risks in the UK's housing market as the greatest threat to the country's economic outlook. He went on to say that the Bank will not directly intervene on house prices, but is instead only interested in "the rate of growth of mortgages, which is today very low".

- (Broadbent - Deputy Governor Bank of England.)

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