That is a HUGE drop from last year, although I suspect the fourth holiday makes it look worse than it is.
Even if vols. are down only in the 25-35% range, doesn't that mean that 25-35% fewer brokers are needed these days? Or are they all making 25-35% less money?
Several childhood friends of mine and one cousin work in that business (doesn't everybody in OC?) but I haven't really spoken to them about it. As far as I know they're all still working.
ac, The MBA index has been fairly flat for a several months now. But the comparisons are getting worse because in 2005 sales were rapidly increasing through July.
Oops, I didn't put the larger graph - I'll fix that so you can click on the graph and get a larger image.
I'm trying to square the purchase index number (-23.4%) with the numbers NAR is reporting for home sales. I'm not sure how mortgages can be off 20 percent while sales are just of 7 percent.
One plausable explaination is that some percentage of the buying market is downsizing their housing and their existing equity is covering the move (i.e. empty-nesters). I got a family member looking in that direction.
EProbert -
A (former) mortgage broker friend pulled out of the business some 5-6 mo ago because he saw better opportunities elsewhere. I haven't figured out if he was very lucky or very smart.
Next time I see the cousin (really my wife's cousin) I'll ask her how business is going.
She's young, so she'll bounce back from any setback easily enough, but I do worry about people like her because they passed up college for the easy money of the socal RE market.
I saw something related on the OC register blog - more OC mortgage layoffs.
Lindsey, I think the NAR numbers are lagging. For July (a tough comparison to '05) we need to look at the NAR numbers for September - released in October - because NAR reports at the close of escrow (usually 30 to 60 days after the mortgage application is submitted.
Thanks for the response. That really is quite a lag if that's what's happening. Maybe EProbert's got a piece of the answer too, though I just can't see such a huge part of the market being comprised of those downsizing.
Either way, Lereah's predictions aren't reflecting a sharp downturn. His reduction in sales number keeps creeping up (check his press releases at nar.org, my file on it is on my office computer), but existing sales are still predicted to fall less than 7 percent and new sales are predicted to decline less than 13 percent.
I know he's always accused of being a cheerleader, but if sales this year drop by 20 percent he should have zero credibility going forward.
If the NAR numbers are lagging, we should be able to look back 30 - 60 days at the mortgage application data and see a more moderate decrease of some kind. Looking back thought, it's down more than -20% YoY through April (except 5/17 = -14%).
Nevermind - I looked at the Total number in the archvies instead of the Purchase number. There are periods of ~10% decrease in purchange mortgage applications for May-April.
I find it astounding that the index was down 29.1% "unadjusted" versus up 1.0% "adjusted". That's one huge adjustment factor.
The only thing I can think is that it takes into account the 4th of July.
Mike, I think you are correct - it was a holiday week.
Best Wishes.
CR, is my interpretation correct that the YoY change in the Purchase Index is increasingly negative?
Wasn't it closer to -20% a short while back?
That is a HUGE drop from last year, although I suspect the fourth holiday makes it look worse than it is.
Even if vols. are down only in the 25-35% range, doesn't that mean that 25-35% fewer brokers are needed these days? Or are they all making 25-35% less money?
Several childhood friends of mine and one cousin work in that business (doesn't everybody in OC?) but I haven't really spoken to them about it. As far as I know they're all still working.
ac, The MBA index has been fairly flat for a several months now. But the comparisons are getting worse because in 2005 sales were rapidly increasing through July.
Oops, I didn't put the larger graph - I'll fix that so you can click on the graph and get a larger image.
Best Wishes.
I'm trying to square the purchase index number (-23.4%) with the numbers NAR is reporting for home sales. I'm not sure how mortgages can be off 20 percent while sales are just of 7 percent.
Any explanation?
Lindsey -
One plausable explaination is that some percentage of the buying market is downsizing their housing and their existing equity is covering the move (i.e. empty-nesters). I got a family member looking in that direction.
EProbert -
A (former) mortgage broker friend pulled out of the business some 5-6 mo ago because he saw better opportunities elsewhere. I haven't figured out if he was very lucky or very smart.
Mike
Next time I see the cousin (really my wife's cousin) I'll ask her how business is going.
She's young, so she'll bounce back from any setback easily enough, but I do worry about people like her because they passed up college for the easy money of the socal RE market.
I saw something related on the OC register blog - more OC mortgage layoffs.
Lindsey, I think the NAR numbers are lagging. For July (a tough comparison to '05) we need to look at the NAR numbers for September - released in October - because NAR reports at the close of escrow (usually 30 to 60 days after the mortgage application is submitted.
Best Wishes.
Thanks for the response. That really is quite a lag if that's what's happening. Maybe EProbert's got a piece of the answer too, though I just can't see such a huge part of the market being comprised of those downsizing.
Either way, Lereah's predictions aren't reflecting a sharp downturn. His reduction in sales number keeps creeping up (check his press releases at nar.org, my file on it is on my office computer), but existing sales are still predicted to fall less than 7 percent and new sales are predicted to decline less than 13 percent.
I know he's always accused of being a cheerleader, but if sales this year drop by 20 percent he should have zero credibility going forward.
CR,
If the NAR numbers are lagging, we should be able to look back 30 - 60 days at the mortgage application data and see a more moderate decrease of some kind. Looking back thought, it's down more than -20% YoY through April (except 5/17 = -14%).
Mike
Nevermind - I looked at the Total number in the archvies instead of the Purchase number. There are periods of ~10% decrease in purchange mortgage applications for May-April.