So there was this big jump in mortgage purchase applications today. I thought to myself, “Hmmmm, I wonder how many will make it to closing. And I wonder what triggered the pop.” Pop is relative of course. Yeah, it was a 9% jump from last week, but the level is still 35% below last year in the same week and 62% below the May 2005 peak (I sold my house in Florida in April 05, closed in June, thank you very much Mr. Greenspan).
So I dug a little deeper, held my nose, read the press release straight from the MB Ass. And there it was.
“The increase in purchase activity was led by a 17.2 percent increase in FHA applications, while conventional purchase applications also increased by 3.6 percent,” said Jay Brinkmann, MBA’s Chief Economist. “This is the second straight weekly increase in purchase applications and the highest Purchase Index level since the expiration of the homebuyer tax credit program. One possible driver of last week’s big increase in FHA applications was a desire by borrowers to get applications in before new FHA requirements took effect October 4th, which included somewhat higher credit score and down payment requirements.”
The old “BUY NOW before we make it impossible for you” trick.
So much for that pop.
I’ll be updating the chart and commentary in the Professional Edition Housing Report tomorrow. You can stay up to date with regular updates of the US housing market, along with the machinations of the Fed, Treasury, and foreign central banks in the US market in the Fed Report in the Professional Edition, Money Liquidity, and Real Estate Package. Try it risk free for 30 days. Don’t miss another day. Get the research and analysis you need to understand these critical forces. Be prepared. Stay ahead of the herd
- MBA: Mortgage Purchase Activity increases, FHA applications increase sharply (calculatedriskblog.com)
- US home purchase loan demand up as rates hit record lows (reuters.com)
- Taking the New 2009 First-Time Homebuyer Credit (turbotax.intuit.com)
- CalHFA Announces Launch of New 30-Year Mortgage (eon.businesswire.com)
- Home Loans for Purchases Rise 9.3 Percent (nytimes.com)
- Home Loans for Purchases Rise 9.3 Percent (abcnews.go.com)