US Purchase Mortgage Demand Increased 3% From Previous Week (Pulte’s 50Y And Layaway Mortgages??)

The US mortgage market is “livin’ on a prayer.” As a result, former homebuilder and current FHFA Director Bill Pulter has suggested 2 mortgage products to make US homes more “affordable”, adding to the legacy of stupid government policies to increase homeownership.

But first, current mortgage demand. Mortgage applications increased 0.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending November 7, 2025.

The Market Composite Index, a measure of mortgage loan application volume, increased 0.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1 percent compared with the previous week. The seasonally adjusted Purchase Index increased 6 percent from one week earlier. The unadjusted Purchase Index increased 3 percent compared with the previous week and was 31 percent higher than the same week one year ago.

The Refinance Index decreased 3 percent from the previous week and was 147 percent higher than the same week one year ago.

Now on to Pulte’s stupid mortgage proposals.

Pulte Doubles Down After 50-Year Backlash, Proposes “Layaway Mortgage”

The 50-year mortgage is a stupid idea. True, it can reduce the monthly mortgage payment by several hundred dollars. But it extends the life of the mortgage from 30 to 50 years, keeping the outstanding mortgage balance elevated for longer, exposing the lender (or mortgage owner) to greater losses in the case of default. Not surprising since the duration risk of a 50-year mortgage is greater than on a 30-year mortgage. Who is going to hold these mortgages??

So, Pulte hearing that the mortgage market thinks this is a stupid idea, introduced another stupid mortgage idea: the “layaway mortgage” where buyers make payments for 5-10 years before they’re allowed to move into the home. This is a variation of “rent to own.”

Under Pulte’s Layaway Mortgage program:

▪️ Buyers select a home and begin making monthly payments immediately
▪️ They continue paying for 5-10 years (the “layaway period”)
▪️ During this time, they cannot live in the home, modify it, or even visit without an appointment
▪️ After the layaway period ends, buyers can move in and begin their 40-year mortgage
▪️ If they miss a payment during layaway, they forfeit everything and the home goes back on the market.

So, in other word, a 50-year mortgage (40+10 layaway).

Note: Japan used to offer 100-year mortgages during their housing bubble, but now 35-year mortgages are more common.

Is The Mortgage Market Back?Mortgage Refinance Applications Increased in Weekly Survey (+10 Percent) While Purchase Applications Increased (+4 Percent)

The mortgage market is back in town!

Mortgage applications increased 2.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending February 7, 2025.

The Market Composite Index, a measure of mortgage loan application volume, increased 2.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 6 percent compared with the previous week. The unadjusted Purchase Index increased 4 percent compared with the previous week and was 2 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier.

The Refinance Index increased 10 percent from the previous week and was 33 percent higher than the same week one year ago.

Prepays are down significantly since 2021 which marks the beginning of The Fed starting to raise rates.

Aggregate prepayments for agency mortgage-backed securities (MBS) fell 12% in January, with housing seasonals declining and mortgage rates lingering near 7%. MBS turnover speeds have bounced back considerably relative to 2023 lows, though high rates may be starting to take a toll. Even at current elevated rates, GNMA streamline refinancings are picking up as loans issued in spring of 2024 pass out of the refi lockout period.

Not Big Mac! Freddie Mac House Price Index Increased in December By Up 4.0% YoY (Austin Tx Is Down -12.7% From Peak)

No, Freddie Mac is not a new cheeseburger from McDonald’s. Freddie Mac is a government sponsored enterprised (GSE) that purchases residential mortgages from lenders and assists in the bundling of mortgages into mortgage-backed securities (MBS). They also monitor home prices.

Freddie Mac reported that its “National” Home Price Index (FMHPI) increased 0.54% month-over-month on a seasonally adjusted (SA) basis in December. On a year-over-year basis, the National FMHPI was up 4.0% in December, up from up 3.9% YoY in November. The YoY increase peaked at 19.0% in July 2021, and for this cycle, bottomed at up 0.9% YoY in May 2023.

But let’s look at the dark side of home prices, which is price declines. Led by Communist enclaved Austin Texas, down -12.7% from peak. The next six cities are all in Florida.

I was watching Varney and Company on Fox Business and it dawned on me that Jonathan Hoenig from Capitalist Pig needs to lay off the caffeine!

Maybe Freddie Mac should partner with McDonald’s. After all, clumsy shooter Angel Reese from WNBA’s Chicago Sky just signed with McDonald’s.

My Mortgage Market Was Gone! Mortgage Purchase Applications Rise 7% Since Previous Week, But Refi Applications Fall 3%

As The Pretenders sang, “My City Was Gone.” That song was about Akron, Ohio. But it applies to the US Mortgage Market under Biden/Harris. The question is whether Trump’s deregulation plans can return to its former glory.

Mortgage applications increased 0.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 17, 2025.

The Market Composite Index, a measure of mortgage loan application volume, increased 0.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 3 percent compared with the previous week. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index increased 7 percent compared with the previous week and was 2 percent higher than the same week one year ago.

The Refinance Index decreased 3 percent from the previous week and was 42 percent higher than the same week one year ago.

The Pretenders’ lead singer Chrissie Hynde likely would have made a better Federal Reserve Chair and Treasury Secretary than Janet Yellen.

Off To A Bad Start! Mortgage Purchase Applications Declined 7% Since Last Week, Down 15% Since Same Week Last Year

Mortgage applications decreased 3.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 3, 2025. This week’s results include an adjustment for the New Year’s holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 3.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 47 percent compared with the previous week. The seasonally adjusted Purchase Index decreased 7 percent from one week earlier. The unadjusted Purchase Index increased 43 percent compared with the previous week and was 15 percent lower than the same week one year ago.

Purchase application activity is up about 2% from the lows in late October 2023 and is now 15% below the lowest levels during the housing bust.

The Refinance Index increased 2 percent from the previous week and was 6 percent lower than the same week one year ago.

Then we have this diddy from The Epoch Times where a mortgage company allegedly provided a loan to a household that had 33 debts in collection. Hey, I thought under Senator Elizabeth Warren’s brainchild these reckless lending practices were over!

One will be gone on January 20 and I wish the other one would be gone too.

Slow Down? Existing Home Sales Rise YoY For First Time Since July 2021 (Near 2010 Levels, So Barely Rising)

Its a slow down in the housing market.

Existing Home Sales were expected to rebound modestly in October (+2.9% MoM) after dropping for 6 of the last 7 months to the lowest levels since 2010, and they did. Sales rose 3.4% MoM (a beat) but thanks to a downward revision for September from -1.0% to -1.3% MoM. What is most shocking about the shift is that it pushed the YoY change for existing home sales positive (+2.9% YoY) for the first time since July 2021…

Source: Bloomberg

…but in context, that shift up to 3.96mm SAAR homes sold is nothing…

Source: Bloomberg

High borrowing costs have led to a shortage of previously owned homes on the market, discouraging many would-be home sellers from listing their properties for sale and having to part with their current low financing costs.

“Additional job gains and continued economic growth appear assured, resulting in growing housing demand,” NAR Chief Economist Lawrence Yun said in a prepared statement.

“While mortgage rates remain elevated, they are expected to stabilize.”

Last month, the inventory of available homes edged up 0.7% to 1.37 million, continuing to trend higher although well below pre-pandemic levels.

Despite the weakness in sales, tight inventory is keeping prices elevated, yielding one of the least affordable housing markets on record. The median sale price last month increased 4% from a year earlier to $407,200, the highest ever for any October, the NAR figures show.

Contract signings rose in all four US regions, led by a 6.7% jump in the Midwest.

Sales of single-family homes increased 3.5% in October; purchases of condominiums and co-ops were up 2.7%

Finally, while that’s all very exciting – a scintilla of growth off almost record lows – the fecal matter is about to strike the rotating object as rising mortgage rates lagged impact threatens…

Source: Bloomberg

In October, 59% of homes sold were on the market for less than a month, compared with 57% in September, and 19% sold above the list price. Properties remained on the market for 29 days on average, compared with 28 days in the previous month. First-time buyers made up 27% of purchases, still historically low.

Already Gone! Mortgage Applications Rise Since Last Week, But Mortgage Purchase Applications Down -60% Under Biden/Harris

Fortunately, the Biden/Harris administration is winding down. On the mortgage side, the mortgage market is already gone under Biden/Harris where mortgage purchase applications are down a whopping 60%.

Mortgage applications increased 1.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending November 15, 2024.

The Market Composite Index, a measure of mortgage loan application volume, increased 1.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1 percent compared with the previous week. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 1 percent lower than the same week one year ago. And down -60% under Biden/Harris.

The Refinance Index increased 2 percent from the previous week and was 43 percent higher than the same week one year ago.

Slowing economy, rising rates, too expensive housing. Not a good sign for the mortgage market.

Bungle In The Economic Jungle! Existing Home Sales Decreased to 3.84 million SAAR in September, New Cycle Low (Lowest Since 2010)

We are in the jungle. And its a bungle in the economic jungle.

Existing home sales disappointed (yet again) in September, declining 1.0% MoM (vs expectations of a 0.5% MoM rise). August’s 2.5% MoM drop was revised up to a 2.0% MoM drop, but still left existing home sales down 3.5% YoY…

Source: Bloomberg

Total sales SAAR dropped to 3.84mm, the lowest since 2010…

Source: Bloomberg

Even with the weaker September sales figures, “factors usually associated with higher home sales are developing,” Lawrence Yun, NAR chief economist, said in his ubiquitously optimistic statement.

“There are more inventory choices for consumers, lower mortgage rates than a year ago and continued job additions to the economy.”

First-time buyers made up 26% of purchases, matching an all-time low.

Some 1.39 million homes were for sale in September, up 23% from a year earlier, the NAR report showed. The supply of homes still remains below pre-pandemic levels.

At the current sales pace, available inventory would last 4.3 months, the longest in more than four years.

The median sales price rose 3% in September from a year ago to $404,500.

Around the country, previously owned home sales dropped in three of four regions, including a 1.7% decline in the South to the slowest pace since the start of 2012.

Closings fell 2.2% in the Midwest to a 13-year low, and 4.2% in the Northeast. Sales rose 4.1% in the West, driven by California and Arizona.

While the short-term (lagged) may bring an improvement in existing home sales (based on the lagged impact of declining mortgage rates), as the chart below shows, since The Fed unleashed its rate0cutting cycle, mortgage rates have risen aggressively once again…

Source: Bloomberg

…not a good sign for the housing market’s affordability.

However, inventory problems could persist since “84 percent of mortgaged homes have a rate below 6%, so the number of sellers that would be financially incentivized to sell would remain limited,” Odeta Kushi, deputy chief economist at title insurance giant First American Financial Corp. said in the report.

Watch Harris laugh insanely if confronted with this news.

Getting Out Of Dodge! May’s Active Housing Inventory Explodes +27.5% YoY (Denver UP 75.2% YoY)

Gimme two steps to sell my house. Are people getting out of dodge?? Calfornia Gpvernor “Greasy Gavin” Newsom sold his Sacramento home and moved to Marin County for better schools. Sacrramento active housing inventory is up 65.6% YoY.

Active housing inventory in May is up 27.5% YoY nationally, with Denver leading at 75.2% YoY. I highlight Columbus Ohio at +32.9% since that is where I live.

While the government may be able to fake BLS and CPI data to gloss over the fact that 5.5% rates have already likely driven the nation into a deep recession, independent data on the housing market is showing a decades-long shortage in inventory starting to rebound.

A new report from Construction Coverage has revealed where the largest increases in real estate inventory in the U.S. are taking place.

The report notes that the current housing shortage—which is now estimated to be between four million and seven million homes—can trace its beginnings to long before the COVID-19 pandemic. In the 10 years following the Great Recession, the United States constructed fewer new homes than in any other decade since the 1960s.

They write that the lack of housing affects certain areas more severely than others. Researchers ranked locations based on the percentage change in the average monthly housing inventory—the total number of active listings plus pending sales at the end of the month—between Q1 2023 and Q1 2024.

Data from a national level showed that U.S. housing inventory decreased from more than two million in 2012 to a low of approximately 630,000 at the start of 2022.

Over the same period, months’ supply—a measure of how long it would take existing inventory to sell if no new homes came on the market—plummeted from a national high of 7.5 months to a historic low of 1.1 months, the report adds.

It also noted that inventory has rebounded slightly since early 2022: throughout the first quarter of 2024, the national inventory hovered around 970,000 homes for sale, marking a 4.0% year-over-year increase.

Despite this uptick, existing inventory would sustain the current sales pace for just 2.9 months—a marginal increase from the 2.8 months’ supply recorded last year.

The report broke down trends by cities and states, finding that as of the first quarter of 2024, states with the lowest levels of supply are concentrated in and around the Midwest (such as Kansas with 1.5 months of supply) and the Northeast (including Rhode Island with 1.8 months of supply).

However, Washington also stands out for having some of the lowest levels of available housing nationally, with just 1.9 months of supply.

In contrast, several states in the South, led by Florida (5.2 months of supply), along with Hawaii (5.2 months) and Montana (5.1 months), present notably more favorable conditions for buyers.

Among the nation’s largest cities, Denver, El Paso, and Dallas recorded the largest year-over-year increases in housing inventory. At the opposite end of the spectrum, Las Vegas, Raleigh, and Chicago recorded the biggest declines.

The data is hardly a 2008-style collapse, but that doesn’t mean it isn’t noteworthy.

While the ‘turning of the tide’ still remains muted, the housing market is so large it rarely corrects swiftly. It’s important to notice, however, that rising inventory ticking higher – combined with mortgage rates now over 7% – could easily be telegraphing a correction in prices heading into 2025.

Wasting Away Again In Bidenville! US New Home Sales Crashed In May (Near 7% Mortgage Rates Aren’t Helping)

It seems everything Biden touches turns to stone. This used to be called “The Medusa Touch” but I changing that to “The Biden Touch.” And that includes housing. Or we can simply sing along with the late Jimmy Buffet and “Wasting aways again in Bidenville.”

And near 7% mortgage rates aren’t helping (as The Fed continues its fight against Bidenflation).

US new home sales were expected to dip 0.2% MoM in May… but they didn’t..

New home sales crashed 11.3% MoM (after April’s 4.7% drop was revised up to a 2.0% MoM rise). That is the biggest MoM drop since Sept 2022…

Source: Bloomberg

This is the biggest YoY drop since Feb 2023, taking the SAAR down to the same level as it was in 2016…

Source: Bloomberg

Median new home price fell 0.9% YoY to $417,400 – lowest since April 2023 – (with the average selling price at $520,000) with a big downward revision for April from $433k to $417k!…

Source: Bloomberg

For the first time since June 2021, median existing home prices are above median new home prices…

Source: Bloomberg

As BofA warned yesterday:

“The US housing market is stuck, and we are not convinced it will become unstuck anytime soon. After a surge in housing activity during the pandemic, it has since retreated and stabilized. We view the forces that have reduced affordability, created a lock-in effect for homeowners, and limited housing activity will remain in place through our forecast horizon “

At the same time, the supply of available homes increased to 481,000, still the highest since 2008.

Source: Bloomberg

New home sales are catching down to the reality of mortgage rates continuing to hold above 7%…

Source: Bloomberg

It seems homebuilders finally gave up filling that gap in anticipation of an imminent Fed rate-cut to save the world.

Will Biden double down on his failed policies tonight in the CNN Presidential debate? Perhaps Joe can sing “Double Shot of Bidenomics.”