Real Estate Market Update | February 21, 2014 Edition

The Mortgage Bankers Association reports home purchasing applications have declined, contrary to expectations

Friday, February 21, 2014 | 3:50 pm

Not wanting to be the bearer of bad news, unfortunately I must report that the housing data continues to decline according to our Market Update February 21, 2014 edition.

The Mortgage Bankers Association reported that applications for purchase loans declined once again by another 6.0%. Mortgage rates have been creeping upward. Additionally the continued harsh weather in the Northeast is also a reason for the continued struggles in home sales. The refinance index declined 3.0% which of course is far more sensitive to interest rate fluctuations.

The greatest concern in the MBA report is that purchase applications are down 17.0% from the same time last year. At this point no one was expecting this. Sentiment heading into 2014 by virtually all experts in the mortgage and real estate field predicted significantly higher volume. The good news is that real estate professionals are stating that they are seeing more activity of potential homebuyers making inquiries to their available inventory.

Housing starts is the other sector of the market that the extreme cold of January took a heavy toll. The most recent report showed a decline of 16.0 percent to an 880,000 annual unit rate. Continuing in a downward trend were single-family homes which fell 15.9 percent to 573,000. Condominiums were down similarly by 16.3 percent to 307,000. The South and West were by far the biggest losers in housing starts with declines of 12.5 percent and 17.4 percent respectively.

I won’t say it is a bright light, but maybe we can call it a glimmer of hope. Permits for new housing construction, which are less affected by weather, showed a smaller decline and probably more closely reflect the underlying trend for the new home market. Permits for single family homes declined 5.4 percent. Permits for condos fell sharply dropping 12.1 percent. Continuing bad weather for the month of February points to the season of spring as being the time when housing will snap back to where it should be.

The latest FOMC minutes indicate that board members continue to debate when and how much tapering should be done. Several members favored continuing a scheduled tapering of $10 billion per FOMC meeting. However, two members indicated a strong desire to pause the tapering due to weakness in the latest economic data combined with continued low inflation. A number of members commented that the recent economic news had reinforced their belief that moderate economic growth over the medium term will continue.

First time jobless claims remained stable for the prior week at 336,000. Experts were predicting 335,000 so the report did not set off any alarm bells related to the labor markets

Next week potential market moving reports are:

· Tuesday February 25th – FHFA Housing Report and S&P Case-Shiller Home Value Index

· Wednesday February 26th – MBA Purchase Applications and New Home Sales

· Thursday February 27th – First Time Jobless Claims and Durable Goods Orders

· Friday February 28th – GDP

As a mortgage professional, I am happy to assist you with any information you may need regarding mortgage or real estate information. I welcome the opportunity to serve you in any way I possibly can. Please feel free to reach me at (626) 486-1775. Also be sure to like our Facebook Page to stay in the know.
About Waleed Delawari

Waleed Delawari is one of Pasadena’s leading mortgage professionals. Since opening his own brokerage firm in 2001, Waleed has successfully closed over one billion dollars in mortgage loans and successfully helped thousands of borrowers purchasing Pasadena Real Estate.

To get pre-approved, contact Waleed Delawari at Delawari Financial.

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