Daily Economic Update: Mortgage Purchase Applications, June 8, 2011

Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update highlights mortgage purchase applications and general housing market sluggishness.

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  People are not taking out mortgages.  The number of applications for home purchase decreased 15.2 percent from the previous week.  Refinancing activity also declined 8.8 percent from the prior week.  These are strange goings-on, since mortgage rates on a 30-year fixed mortgage decreased from 4.58 percent to 4.54 percent during the week.
• There has been general economic and housing market sluggishness in the second quarter of this year.  The likely trigger was  gas prices peaking in April, which then led to a fall in the consumer confidence index.
• Note that the mortgage applications do not include all-cash transactions.  All-cash buys have been about one-third of all sales in recent months, an unprecedented high figure.  A typical historical average would be about 10 percent.  In some markets with heavy foreclosures with deep-discounted prices like in Miami and Las Vegas, all cash share is said to be about 50 percent.