Skip to content

Mortgage Apps Plunge At Fastest Rate In Over 3 Years

We were promised by the cognoscenti of PhD economists that higher mortgage rates would not affect the so-called housing recovery. They devoutly prayed to the god of momentum that “rates were still low historically” and “housing is on a self-sustaining path” and numerous other truisms that always fail at the turning points. Well, it appears from mortgage application data that things are not looking so hot.

Whocouldanode that smashing interest rates higher at the margin (remember its the marginal impact – not absolute since the majority who can have refi’d or purchased down to new low rates with their fixed cash flow and this bid up house prices via their new found affordability) would crush the dreams of an organic (not ‘hedgie-driven flip-dat-house REO-to-Rent’-based) recovery. And don’t forget the drag from these higher rates to come, and what happened the last two times mortgage rates spiked at this pace.

This collapse year-over-year in mortgage apps is as bad as that in 2006 when the last bubble burst…


It’s not like we haven’t seen this effect before – how quickly we forget…


Charts: Bloomberg

Leave a Reply

Your email address will not be published. Required fields are marked *