Mortgage Applications Strongly Up
Posted by Jason Apollo Voss on Mar 10, 2011 in Blog | 4 commentsYesterday the Mortgage Bankers Association announced that its index of mortgage applications rose (a whopping) 16% for the week ending March 4, 2011.
Analysis: I have been saying for many months now that the supply and demand fundamentals of the housing market have been in a state of massive disequilibrium. Predominately there has been too much supply of homes at prices too high in order to attract that critical element: a buyer.
That mortgage applications are up 16% is clearly a sign that supply and demand in the housing market are coming much more in alignment. This is critical in order for one of the most important asset classes to finally stabilize and ultimately, improve.
Since the U.S. economy has learned how to grow gross domestic product (GDP) without the benefit of a juiced real estate industry, any growth in the housing market will add to the strength of the economic recovery as we exit recession. This is a good thing, provided that the Federal Reserve does not leave interest rates too low for too long…again.
The MBA also reported yesterday that its Purchase Index was up 13% and that its Refinancing Index was up 17%. Both of these statistics simply affirm that the housing market is finally returning to proper functioning.
Importance grade: 9; because of the pervasive effects of the mortgage industry on U.S. GDP recovery here affects literally dozens of important industries, from financial services to construction to insurance.
Jason
So one conclusion to draw from this is that it’s cheaper to buy a home now, and I’d get more from selling a home later? (I’m entertaining thoughts of moving from downtown out to Golden. Any time in the next 18 months that I find the right house for the right price.)
Which is to say, my conclusion is indicative of a “normal” market, where inflation & appreciation inspire purchasing now and selling later.
Of course, its always a buyer’s market if you like the place you are looking at and can afford it! Are you a Wax Trax man?
It’s a buyers’ market, fellow Buffalo.