Diana Olick has some depressing — but not unsurprising — news about the housing market:
Demand is high, prices are higher, but the housing numbers this spring are just not adding up. Mortgage origination volumes hit their lowest recorded level since at least 2000, according to a report released Monday from Black Knight Financial Services.
The biggest volume drop is in refinances, which have fallen steadily since rates rose a full percentage point in June, but that’s not the full picture. It is really about who qualifies for a loan and who does not.
“The refinances are burning out a lot faster than anticipated, but the real culprit is purchase,” said Paul Miller, an analyst at FBR Capital Markets. “The purchase market has not picked up at all. It’s not that the buyers are not there, it’s that there is nothing to buy, and everyone is trying to figure out why.”
There’s no mystery about this whatsoever. The simple truth is that you do not make things more affordable and you do not make a nation richer, by making things more expensive. The solution to the housing crisis was to let the damn thing bottom out, and unentangle Washington from the mortgage market — along with debt relief for those who had been stupid/smart enough to have taken “advantage” of Washington’s previous largess.
Instead, we clamped down on credit while pumping prices back up.
I told you five years ago it was a recipe for failure, and here we are.