Mortgage Purchase Applications Plunge To 19-Year Lows

Summary Presented with little comment.. because realistically what is there to say about a so-called 'housing recovery' when the volume of applications for home purchases is the lowest since August 1995.

Keep believing that lower rates will support home prices... keep believing the Fed's QE worked... or face facts, this is not your mother's housing market any more...

The Recovery...

The long-term...

The transmission channel is officially broken...

Comment: The chart above shows mortgage rates (blue) VS. mortgage apps (red).

Usually those two variable are negatively correlated: when one goes up the other one goes down.

However, since 2008 a de-correlation has occured. Despite the drop in interest rate (which should make mortgages more attractive), the number of mortgage application is decreasing.

Indeed even if interest rates were null, buying a house is simply unaffordable with 80% of the US population facing poverty or near-poverty.