US housing starts in April crashed to their lowest level since 2015 despite near-record low mortgage rates.
1-unit starts declined 25.4% from March to April. But it is the 5+ unit starts (apartment) that suffered a 40.31% MoM decline.
It appears that The Fed’s snake juice isn’t working.
I feel like we are in the Three Stooges film “Oyster Stew.” Every time we look for good news, more bad news come out.
But here is some good news.
WTI Crude oil is up 21.26% this morning .. to $16.71 a barrel (still low).
And while US jobless claims rose 4.43 million the past week, the US is several weeks past the peak. (Knock on wood).
But back to crude. Saudi oil is still negative for heavy and medium crudes to the USA.
Now for the oyster eating the cracker.
US new home sales fell -15.4% MoM in March.
As I said, oyster stew.
Mortgage applications increased 7.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 10, 2020.
The Refinance Index increased 10 percent from the previous week and was 192 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 35 percent lower than the same week one year ago.
On the bright side, most of the decline in purchase application occurred before last week.
So, it appears that no more snake juice is required.
Courtesy of the great Jesse from Jesse’s Cafe Americain!
According to the latest survey from the Mortgage Bankers Association (MBA), the Refinance Index decreased 19 percent from the previous week and was 144 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 12 percent from one week earlier. The unadjusted Purchase Index decreased 12 percent compared with the previous week and was 33 percent lower than the same week one year ago.
Yes, 33% lower than the same week a year ago.
And this was in spite of the historic drenching of the market by The Fed with liquidity and trillions in economic something by Congress.
And nearly a third of U.S. apartment renters didn’t pay April rent.
This was a tumble!
(Bloomberg) — U.S. loan applications for buying and refinancing homes plunged last week by the most since the global financial crisis, amid coronavirus shutdowns and related financial turmoil that pushed borrowing costs higher.
The Mortgage Bankers Association’s index of applications fell 29.4% in the week ended March 20, the biggest decline since early 2009. Home-purchase applications dropped by 14.6% while refinancing applications plummeted 33.8%.
The average contract rate on a 30-year fixed mortgage increased 8 basis points to a two-month high of 3.82%, despite the Federal Reserve cutting the benchmark interest rate to near zero.
The decline in applications is an early sign suggesting home sales will slow and that refinancings are coming off a spike. That follows other data indicating a precipitous dropoff in business activity this month as stores and schools shutter to prevent the spread of the virus.
Yes, MBA mortgage applications fell the most since 2009 and the financial crisis.
Mortgage rates actually rose last week (yellow line) but will likely decline this week.
The biggest decline came in mortgage refinancing applications, down 33% WoW.
Mortgage purchase applications dropped 14.64% WoW.
It is the morning after the Fed panicked and lowered its lower bound for The Fed Funds Target rate to … 0%. Here is Fed Chair Jerome Powell calling to The Fed to take evasive action!
The result? US Treasuries yields are falling like a rock. US Treasury 10Y yields are down around 20 basis points this morning.
And unless lenders lower their 30-year mortgage rates, the spread between Bankrate’s 30 year average mortgage rate and the 10 year Treasury yield is at its highest level since Q4 2008, the epicenter of the financial crisis.
This morning before the US equities markets open, Europe is already down around 7% – 8%.
Here is Fed Chair Jerome Powell wishing us all the best!
Today’s headlines scream “Existing home sales decline 1.3% MoM in January!!” True, but on a YoY basis, US existing home sales are up 9.64%.
A big reason? The 30-year mortgage rate plunged faster than a paralyzed falcon. Mostly due to slow global economy and the Corona-virus fears.
Now look at the median sales of existing homes. It continues to be low helping drive up existing home prices.
Notice that EHS inventory increased with median price during the housing bubble, but after 2012, they went their own ways.
I hope the housing market remains Corona-virus-proof!