MBA: Mortgage Purchase Applications Lowest in 12 Years

[girl gone mad]

MBA: Mortgage Purchase Applications Lowest in 12 Years
http://www.calculatedriskblog.com/2010/01/mba-mortgage-purchase-applications.html">Calculated Risk



This graph shows the MBA Purchase Index and four week moving average since 1990.

Note: In the past the MBA index was somewhat predictive of future sales - and was a favorite indicator of Alan Greenspan, but it has been questionable for some time. The increase in 2007 was due to the method used to construct the index: a combination of lender failures, and borrowers filing multiple applications pushed up the index in 2007 even though activity was actually declining. Recently there has been a substantial number of cash buyers, so the MBA index missed the strength of the recent existing home sales increase.

Despite the problems, it is hard to ignore the sharp decline in purchase applications since mid-October. The four week moving average is now at the lowest level since November 1997.

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