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Home Publications Blogs Beat the Press Plunging Mortgage Applications: Reporters Should Notice

Plunging Mortgage Applications: Reporters Should Notice

Wednesday, 18 May 2011 19:46

Home sales fell through the floor last May as the first time home buyers tax credit ended in April. The expiration of the credit pulled a lot of sales forward, so that few people were buying in May.

This is why it should have people very concerned that purchase mortgage applications for last week were actually slightly below the level for the same week last year. The same was true for the prior week also. These are weekly data, which means that the numbers will be erratic, but this is not a good sign.

Comments (2)Add Comment
"Not a Good Sign"
written by Paul, May 18, 2011 9:37
Actually it is an incredibly bad sign because residential real estate was the main driver of job losses in the Great Recession. Until the housing market recovers, the recovery will be anemic and unemployment will remain very high.

But nobody cares because the unemployed don't matter inside the Beltway where only the deficit is a concern. Absolutely nothing will be done to stimulate the housing market which will remain depressed for years.
Residential Real Estate
written by Jeff Z, May 19, 2011 9:01
This just highlights the destructive nature of the housing bubble. It seems that current residential real estate is overbuilt, and that it will take some years to work off the excess inventory.

A better way to stimulate a recovery in the housing market is to generate a more widespread and stronger overall economic recovery. Get people some jobs, some long term, well paying, secure jobs, and they will buy houses again.

If they can get loans.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.