The doom and gloom from the last few weeks is giving way to this bit of positive news today (from Bloomberg):
The Mortgage Bankers Association’s index of applications to buy a home or refinance a loan jumped 8.1 percent to 656.5 from 607.1 the prior week. A gauge of demand for credit for home purchases rose 7.4 percent, and the average rate on a 30-year fixed mortgage fell for the fourth consecutive week, the group said today.
I honestly don’t know when the MBA collects its data or how it measures applications. However, this is positive news and I can attest that we still seem to take application at the same pace as early this year.
If this kind of good news bad news confuses you then The Big Picture has some pretty cool quotes to help explain the recent events. My favorite:
“If you owe the bank $100 that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.”
— JP Getty
Read the full list of quotes here.
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on Aug 9th, 2007 at 11:19 am
Pretty good news there after the subprime market downturn. It’s good that people are finally making way for more and more mortgage applications.
on Aug 9th, 2007 at 12:44 pm
Jessica,
It is good news, but the bad news is overwhelming these days. The market is down today after the largest bank in France said it was re-evaluating its US sub prime holdings.
Thanks for stopping by.
Shailesh
on Aug 10th, 2007 at 11:03 am
App.s are up…hmmm. Do you think it might have something to do with the tightening underwriting guidelines? Me thinks people can’t get loan and apply to as many banks that are (still) open.
on Aug 10th, 2007 at 3:19 pm
Bobby,
People are probably shopping around. I don’t know if the MBA has any way of wedding out multiple applications.
Thanks,
Shailesh
on Aug 11th, 2007 at 3:53 am
Shailesh,
Even European banks are panic-stricken and have started taking out loans from the overnight lending market, just to pay their clients who may intend taking out money from their investments.
It’s pretty clear that the US subprime meltdown has lead to a crisis in the global financial market. Isn’t it a bit surprising that the industry couldn’t anticipate such a big crisis coming up?
on Aug 11th, 2007 at 7:48 am
Jessica,
Somewhere deep down I think they did know. It’s not that hard to imagine this scenario. However, sometimes in the frenzy you kind of lose sight of the risk. I guess you just let the “good times roll” until you have to face reality.
It seems like the European banks are only being cautious.
Thanks for your thoughtful comment!
Shailesh