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Welcome to the 99%, Comrades

April 9th, 2014 - 4:16 pm

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.

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All Comments   (5)
All Comments   (5)
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There's a property across from my house that Wells Fargo holds the papers for. Absolutely cannot get them to quote a price, that's assuming we can get through phone tree hell and get to live meat. It's been empty for several years. No for sale sign, not listed anywhere we can find.
20 weeks ago
20 weeks ago Link To Comment
Interestingly the banks/mortgage holders are declining to foreclose on delinquent properties -- they don't want all those liabilities showing up on
balance sheets.
20 weeks ago
20 weeks ago Link To Comment

Look again.

"It’s not that the buyers are not there, it’s that there is nothing to buy..."

If buyers couldn't pay the prices being asked, then prices would fall. But that's not what is happening. Mortgage origination and refi can't account for the lack of inventory, so where has the inventory gone? Obviously, it's investors making all-cash purchases or operating from a large line of credit.

European money is panicking into the U.S. to buy assets, Asian money is panicking into the U.S. to buy assets, even Americans are being forced by FATCA to bring their money home (most foreign banks will no longer hold an account for an individual U.S. citizen). All that capital flowing back into the U.S., looking for something to land on...
20 weeks ago
20 weeks ago Link To Comment
History will repeat itself this year.
20 weeks ago
20 weeks ago Link To Comment
My mortgage co. Called just yesterday to get me to refi. Lops a full percentage point off the rate. O.k.
Wells Fargo wants me to give them less money, I'll take it.
20 weeks ago
20 weeks ago Link To Comment
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