The Mortgage Bankers Association mortgage purchase applications index dropped again last week. It fell 3% week to week (seasonally adjusted), it fell 14% unadjusted and it plunged 12% year over year. This has been the pattern almost every week this year.
This is particularly bad news for the new homebuilder companies because 93% of all new homebuyers use a mortgage to make their purchase. If purchase applications are not being filed, new homes are not being sold. There’s no room for spin in that. The numbers are the numbers. In my latest research report, the company I feature specifically had to disclose that its contract signings are dropping. Hovnanian reported just this morning that contract signings dropped 9.2% year over year. This is going to turn into a bloodbath.
This post was published at Investment Research Dynamics on September 10, 2014.
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