We were recently asked why we have become so "Real Estate obsessed."
That’s the wrong question. Given how significant Housing has been to job creation and consumer spending, the right question is "Why aren’t you more obsessed with Real Estate."
Let’s look at the most recent mortgage data as an example: This morning, the Mortgage Bankers
Association (MBA) released its Weekly Mortgage App Survey (week ending July 28) called the Market Composite Index. Its a measure of mortgage loan
The most recent data showed a sequential decrease of 1.2% (seasonally
adjusteded) — the lowest the index
has been since May 2002. It was the 3rd straight week of slumping overall mortgage activity, despite interest rate declines over the same timeframe.
On an unadjusted basis, the Index decreased 29.0% compared with the same
week one year earlier.
Hence, our obsession.
Mortgage apps are but one of many indicators of the ongoing housing market slowdown. New Home Sales
were down 11% in the past year, while Existing Home Sales were down 8.9%. Both Housing
starts (down 11%) and Home Builders’ Sentiment Index (down over half — off
41 points in the past year to 39) to levels also suggesting a dramatic cooling in Real Estate.
Its no surprise then that refinancings have become a larger share of mortgage activity, as home sales slide. Adjustable-rate mortgages (ARM) are also decreasing on a percentage basis.
Change in mortgage apps (year over year):
UPDATE August 2, 2006 11:15am
Application Volume Declines in Latest Survey
The Mortgage Bankers Association, August 2, 2006
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.