These two charts put the goings-on in the mortgage market into a long-term perspective, and thus may be helpful. The first chart shows how new applications for mortgages have rebounded this year, and how the volume of new applications is running about three times the rate of 1990. The second chart shows a significant rebound in mortgage refinancings which began about three months ago. And both charts show the yield on conforming MBS, which is an important driver of refis and new mortgage applications.
A few points: by any measure, activity is picking up in recent months, and activity is relatively healthy from an historical perspective; and mortgage rates currently are at very low levels, which is likely to encourage yet more activity and sales. Bottom line: the housing market has some favorable tailwinds at work, in addition to lower and more attractive prices.
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