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The top chart shows an index of mortgage applications (all types), and the bottom chart shows the history of 30-yr fixed mortgage rates. Late last summer I noted what looked to be a new buying uptrend underway, and now it looks like the real thing. There has been a 29% increase in new applications for mortgages since last July, even though 30-yr fixed mortgage rates have been higher than they were last summer for the past 5 months. (Actually that's the wrong way to characterize what has happened: demand for mortgages is not up despite the rise in mortgage rates—mortgage rates are up because of the rise in the demand for mortgages, and the strengthening of the economy in general.) All in all, a healthy sign of improving housing fundamentals.
3 comments:
Seems like the worst is over, let's hope for steady improvement. A rise in real estate values would instill a lot of confidence back into Americans.
Chronically falling real estate values, ala Japan, appear to eviscerate consumer sentiment and investor bullishness.
Maybe I'm reading it wrong, but looking at May 2010 and April 2011, it looks like a big drop.
Everything softened up in Q2/10--that was when the world thought we were headed for a double-dip. Since then the economy has rebounded, and so has the housing market.
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