Mortgage applications fell 17.0% this week on a non-adjusted basis (following a 7.2% the previous week) for the biggest 2-week drop since January 2015. Even on a seasonally-adjusted basis the last 2 weeks have dropped 6.2% and 7% (the biggest 2 week drop since Feb 2015). However, just as Sept 2014 was notably seasonally weak for mortgage applications, for this time of year, mortgage applications have not been weaker since 2000.
So we have mortgage rates still hovering near record lows. We supposedly have the lowest unemployment rate since 2007. Obama is tweeting about the 13 million jobs he has created. The economy has supposedly been growing for the last six years. Consumer confidence is back to pre-recession highs. And home prices have risen by 30% since 2012. The National Association of Realtors reports price wars and tremendous demand for homes.
One question. In a normal, non-manipulated, market based housing market, wouldn’t homes be bought by families who obtained a 30 year mortgage? Does the chart below present a strong recovering housing market?
Mortgage applications to purchase a home are at 2009 recession lows. They haven’t gone anywhere in five years. The peak was 2005 and the housing market was in full collapse mode in 2008. Mortgage applications are 40% below 2008/2009 levels. They are 50% below 2001/2002 levels. There is no housing recovery. Tolls Brothers and Hovnanian are reporting lower sales versus last year.
The entire housing recovery meme is bullshit. Wall Street, the Fed, the Treasury and the White House have colluded to drive home prices up to benefit the Wall Street shysters and to use as propaganda in their game to convince Americans the economy is great. Chinese and Russian billionaires, hedge funds, and flippers have been the major buyers driving up prices to unaffordable levels for most Americans.
This shitty recovery is all we’ve gotten with mortgage rates at all-time lows. Imagine the shitstorm headed our way with mortgage rates headed higher.
10 most overvalued housing markets in America
By Catey Hill
Published: Sept 15, 2015 5:00 a.m. ET
Buyers and investors beware: the number of real-estate markets that are now overvalued is growing rapidly.
Of the top 100 real-estate markets in the U.S., 14 are now overvalued — more than double the number that were at the end of the first quarter in 2015, according to a report released on Monday by real estate analytics firm CoreLogic, which examines market data for the first half of 2015. An overvalued housing market has home prices that are 10% or more above the long-term sustainable level (which measures home affordability based on the per capita income levels in the area).
The primary driver behind the overvaluation of more housing markets is supply, says Sam Khatar, the chief economist at CoreLogic. “Builders are not building enough — they’ve focused on margins and not scale,” he says. This, in turn, has led them to focus on the upper end at the expense of the middle and lower end of the markets, where demand is strong once again, he says.
After years of struggling, the U.S. housing market has rebounded to the point where prices in many cities have soared beyond affordability.
Plus, this all comes at a time when home prices are rising rapidly, even as incomes aren’t seeing as much growth. In the past two years, home prices in the U.S. have climbed 11.5% to a median price of $189,500, according to data from real-estate firm RealtyTrac. And in some markets, home price appreciation has climbed more than 20%. Incomes, meanwhile, have not kept pace: Real disposable personal income in the U.S. has increased only about 5.5% over the past two years, according to data from the Federal Reserve Bank of St. Louis using inflation-adjusted numbers.
Of course, there are still plenty of individual deals to be found, even in overvalued markets. And, as Khatar points out, “just because a market is overvalued doesn’t mean it’s a bubble.”
Here are the 10 most overvalued housing markets in America, according to CoreLogic.
Austin, Texas
The rapidly growing Austin and Round Rock area lands in the No. 1 spot on this list with home prices a staggering 42.3% over what’s considered sustainable. Since January 2014, home prices have risen 16.3%, compared with 10.4% in 2013.
Houston
Like in Austin, home prices in the Houston area, which includes The Woodlands and Sugar Land, have risen more than 16% since early 2014 — and this oil capital also now has a problem with overvaluation. Home prices are now 25.4% over what’s considered sustainable.
Charleston, S.C.
Homes in historic Charleston and North Charleston are priced at 23.4% more than what’s sustainable and have grown in value 12.8% since January 2014 (as compared with 5.4% in 2013).
Construction cranes dot the Miami, Florida skyline, shown, Sunday, March 11, 2007.(Photographer: Richard Sheinwald/ Bloomberg News)
Miami
Hit hard by the recession, Miami is back — and then some. Homes here (the area includes Miami, Miami Beach and Kendall) are now priced, on average, 20.6% more than what’s sustainable. Meanwhile, home prices continue to appreciate rapidly (15.6% since January 2014 compared with 11.5% in 2013).
Washington, D.C.
Though a vibrant place to live, the D.C. area has its downsides, including the worst traffic in the nation and pricey real estate that most cannot afford. Homes here (the area includes Arlington and Alexandria, Va.) are priced at more than 19% over sustainable levels.
Knoxville, Tenn.
Knoxville is one of two spots in Tennessee that make this list, with homes now priced at 14.4% over sustainable levels. Home prices have appreciated 11.3% since January 2014, compared with 4.5% in 2013.
Philadelphia
Home prices have ascended rapidly in the Philly area (up 16.7% since early 2014, which means it has the fastest home price appreciation of any town on this top-10 list), and now they are priced at 14.2% over sustainable levels.
Dallas
Cities in Texas dominate this list (they make up four of the top 10) in large part because their robust economy and relative affordability have attracted many people to the area in recent years. However, the housing supply hasn’t been able to keep up with demand, explains Khatar. In the Dallas area, including Plano and Irving, homes are priced at 14% over sustainable levels.
San Antonio
This is the fourth Texas city on this list; its home prices are valued at 12.4% over sustainable levels. Home price appreciation in the area (which includes New Braunfels) since early 2014 was 10.3%, compared with 6% in 2013.
Nashville, Tenn.
Many cash-strapped residents in the Nashville area (which includes Davidson, Murfreesboro and Franklin) are likely singing a sad song about their housing market: Homes are now priced at 12.3% over what’s considered sustainable, after having grown 14.1% since early 2014.
I wonder why obama went on twitter today to brag about his economy.
Is he trying to lay the claim that he fixed the economy so he can blame republicans when the shit finally hits the fan?
Probably.
“As the White House and lawmakers stare down a Sept. 30 deadline to fund the government for the next fiscal year, President Barack Obama has taken to Twitter to plead his case.
Tuesday night he fired off several tweets showing how his government has improved the economy”
Mr Card, maybe Hussein has a future as a comedian. Maybe it depends on what the definition of “improved” is. What difference does it make anyway; let them eat cake.
Mortgage applications have fallen because of the weather. It has been unusually nice this summer, and people are taking more vacations, since the unemployment rate is so low, they have more money.
The oilfield in West Texas and SE NM is in a deep recession due to price collapse. A small town here just lost a company along with 200 jobs. Here come a crime wave.
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For the first time I tried to give myself a thumb (down) didn’t work.
Sad there are so many people that believe the above is true and that voting for more of the same is going to keep the good times rolling.
Nuff said.
It’s been flat for 3 years. Could be worse. Everyone knows that the housing recovery has just been a bunch of rich bastards (foreign and domestic) who benefitted from all that QE money. They bought all these homes in the hopes of renting them out. That’s great and all, but it does nothing for the mortgage market. Housing prices are still way too high. Mortgage rates need to be steadily declining if we want to see an increase in mortgage applications at these prices. And of course mortgage rates stopped going down quite a while ago. It doesnt matter that rates are historically low, they need to be low and trending lower.
I can’t believe Seattle isn’t on that overvalued list. Take a look at this 700 sq. ft. gem which is what you can get for just a touch over half a million dollars.
“Hot Home: There is an 80% chance this home will sell in the next 6 days”
https://www.redfin.com/WA/Seattle/2117-5th-Ave-W-98119/home/135156
In 2008 Seattle was full on foreclosureville. Seven years later it is this. I’m pretty sure what’s coming next.
Stanley – that’s actually just shy of $600,000!! Love the derelict garden, missing light fittings in the kitchen area, and the panoramic views of the next door neighbour’s wall – literally an arms-length away.
I’ve seen similar “quality” properties in the Sydney Metropolitan area going for similar (and often far higher) prices – AND GETTING THEM.
The future is starting to look very bleak indeed . . . . .
Stanley
In that “HOT seattle home”
The ceiling in the kitchen is right about 6 ½ ft to no more than 80 in. height.
I don’t know what the codes are in Seattle but that wouldn’t meet code where I am.
The Shit Barometer is when TPTB haul butts and the Shit Winds will be caused by the vacuum of their wake.