Wow, thank goodness for those moving averages, CR. There's a lot of volatility in this number from week to week.
Even though this week's number is down, it looks like the averages are trying to head up. I wonder how much strength there is in that move given the current trend in the 10-year (and mortgage rates) is up.
Could it be the app trend is a trailing indicator for mortgage rates? Or is that too simplistic given the other factors weighing on the housing market?
Looks like people are trying to refinance while they still can. Looking at the charts of mortgage operators they should start thinking soon if they want to accept more subprime applications.
Look at CFC (Countrywide), it's dropping like a stone on no news. And I don't expect anything really bad for such a big lender.
Novastar (NFI) stock shows no support so far. Maybe it will stop only at $0.
Looks like people are trying to refinance while they still can. Looking at the charts of mortgage operators they should start thinking soon if they want to accept more subprime applications.
Look at CFC (Countrywide), it's dropping like a stone on no news. And I don't expect anything really bad for such a big lender.
Novastar (NFI) stock shows no support so far. Maybe it will stop only at $0.
The country is finally in ice and cold. Look for purchase apps next week to decline a lot.
All those numbers are seasonally adjusted. With all this global warming the seasonal adjustment gives an optimistic picture. Should we have weather-adjusted indices instead?
Look at construction lay-offs soon, as winter finally takes off.
Does anybody know how they count multiple applications? What if people are getting more and more problems with getting mortgage so they apply in multiple places? What is the methodology for this index?
poszi, this index can't "de-dupe." The MBA collects numbers of applications from its survey participants, not identifying characteristics (like a property address) that would allow anyone to to clean up the data. So there can be, and surely are, cases where the same application is submitted to more than one lender. Only one loan is going to close, if any loan closes, so you can conceivably get a spike that is due more to brokers trying harder (buckshotting apps to multiple wholesalers). I couldn't tell you whether that's a significant pressure on the numbers these days or not. My experience in prior downturns, however, is that loan officers and brokers submit anything that moves as often as they can as their income is increasingly dropping like a brick, and that whenever there is significant discontinuity in credit guidelines--that is, in the period when the whole industry is largely tightening, but at different speeds and in slightly different ways, some with underwriting guidelines, some with product availability, some with price--submitting multiple apps simultaneously is a predictable way the brokers deal with it. I should note that they can also do it serially rather than simultaneously, and in that case you'd see the dupes supporting what otherwise appears to be a stable trend, rather than spiking the number in any given week. I really think the only thing you can do is keep it in mind, watch the trendlines, and keep comparing it to closings. I saw that a number of news services reported CFC's announcement the other day that apps were up YoY, without reporting their other announcement that fundings (a wholesaler's equivalent of closings) were down YoY. I begin to wonder how many investors in mortgage companies understand that an application is a necessary but not a sufficient condition for ending up with a loan.
Thanks for the explanation. If this index just tracks only applications and only in half of the market that we can safely treat it like a curiosity. It may have some real life importance but probably has not.
Wow, thank goodness for those moving averages, CR. There's a lot of volatility in this number from week to week.
Even though this week's number is down, it looks like the averages are trying to head up. I wonder how much strength there is in that move given the current trend in the 10-year (and mortgage rates) is up.
Could it be the app trend is a trailing indicator for mortgage rates? Or is that too simplistic given the other factors weighing on the housing market?
Looks like people are trying to refinance while they still can. Looking at the charts of mortgage operators they should start thinking soon if they want to accept more subprime applications.
Look at CFC (Countrywide), it's dropping like a stone on no news. And I don't expect anything really bad for such a big lender.
Novastar (NFI) stock shows no support so far. Maybe it will stop only at $0.
Looks like people are trying to refinance while they still can. Looking at the charts of mortgage operators they should start thinking soon if they want to accept more subprime applications.
Look at CFC (Countrywide), it's dropping like a stone on no news. And I don't expect anything really bad for such a big lender.
Novastar (NFI) stock shows no support so far. Maybe it will stop only at $0.
The country is finally in ice and cold. Look for purchase apps next week to decline a lot.
All those numbers are seasonally adjusted. With all this global warming the seasonal adjustment gives an optimistic picture. Should we have weather-adjusted indices instead?
Look at construction lay-offs soon, as winter finally takes off.
I'm going to ignore the mortgage applications until March or so because I think the seasonal adjustments make them too volitile this time of year.
Unless we see a dramatic drop and I can use that to great effect in some argument or another.
Does anybody know how they count multiple applications? What if people are getting more and more problems with getting mortgage so they apply in multiple places? What is the methodology for this index?
poszi, this index can't "de-dupe." The MBA collects numbers of applications from its survey participants, not identifying characteristics (like a property address) that would allow anyone to to clean up the data. So there can be, and surely are, cases where the same application is submitted to more than one lender. Only one loan is going to close, if any loan closes, so you can conceivably get a spike that is due more to brokers trying harder (buckshotting apps to multiple wholesalers). I couldn't tell you whether that's a significant pressure on the numbers these days or not. My experience in prior downturns, however, is that loan officers and brokers submit anything that moves as often as they can as their income is increasingly dropping like a brick, and that whenever there is significant discontinuity in credit guidelines--that is, in the period when the whole industry is largely tightening, but at different speeds and in slightly different ways, some with underwriting guidelines, some with product availability, some with price--submitting multiple apps simultaneously is a predictable way the brokers deal with it. I should note that they can also do it serially rather than simultaneously, and in that case you'd see the dupes supporting what otherwise appears to be a stable trend, rather than spiking the number in any given week. I really think the only thing you can do is keep it in mind, watch the trendlines, and keep comparing it to closings. I saw that a number of news services reported CFC's announcement the other day that apps were up YoY, without reporting their other announcement that fundings (a wholesaler's equivalent of closings) were down YoY. I begin to wonder how many investors in mortgage companies understand that an application is a necessary but not a sufficient condition for ending up with a loan.
Tanta,
Thanks for the explanation. If this index just tracks only applications and only in half of the market that we can safely treat it like a curiosity. It may have some real life importance but probably has not.