The Housing Market Continues This Losing Streak
The downtrend in mortgage applications continued for another week as they hit their worst level in two decades. In the latest update from the Mortgage Bankers Association, for the week ended February 21, applications for home loans plunged 8.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index fell 7.5 percent.
There have only been a handful of increases over the past nine months with the housing market returning to a more sustainable pace. As the chart above shows, mortgage applications are at their worst level years. The Refinance Index also dropped 11 percent, while the Purchase Index declined 4 percent from the previous week. In fact, the Purchase Index is now at its lowest level since 1995. On an unadjusted basis, the Purchase Index was 15 percent below year-ago levels.
Housing bulls expecting the recent weakness to turnaround will need to wait at least a little longer. “Purchase applications were little changed on an unadjusted basis last week, but this is the time of a year we would expect a significant pickup in purchase activity, and we are not yet seeing it,” said Mike Fratantoni, MBA’s Chief Economist, in a press release.