The volume of mortgage applications declined 2.5 percent for the week ending Sept. 11, 2020, according to the Mortgage Bankers Association’s (MBA) weekly survey. The data included an adjustment for the Labor Day holiday.
On an unadjusted basis, the market composite index, which measures mortgage loan application volume, decreased 13 percent compared to the previous week. The refinance index declined 4 percent from the previous week but increased 30 percent year-over-year.
The seasonally adjusted purchase index decreased 1 percent from the week before while the unadjusted purchase index dropped 12 percent from the week prior and rose 6 percent year-over-year.
Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement. “A 5 percent decline in conventional refinances pulled theoverall index lower, but activity was still 30 percent higher than last year. With the flurry of refinancing activity reported over the past several months, demand may be slowing as remaining borrowers in the market potentially wait for another sizeable drop in rates.”
Hmm…can we thank the expiration of the government tax credit for this drop?
Some would claim that the tax credit did boost housing activity. But others might argue that all it did was pull forward sales transactions, so it didn’t add much new volume into the system. Net result: taxpayers’ money is transferred to homebuyers, but no new real activity in the marketplace.
What am I seeing? One metric that I use (not very scientific) is that I can get a good idea what future sales will look like based on my internet sales leads. I hope this unproven sales analysis stays unproven because I have seen a major drop off on internet sales leads in the last two weeks.
File Under: Food Stamps.