I’m posting the final article in my 3-day “housing bubble” sequel. Two previous reports were covering trailing indicators and demonstrated how bad the real estate market was back in April. Today we got some fresh June numbers, and they are not pretty. The MBA mortgage applications fell by 6.7%:

  1. Purchase index is running at 18.2% below same time last year
  2. Purchase index is 12.5% below January, or is on track for 25% y/y decline
  3. The overall index is at 4-year low, same level as May 2002
  4. Mortgage rate stands at 6.86%

Tomorrow feds will perform a clean kill of adjustable ARM rates by increasing the rate to 5.25%. By the time of the next meeting the real estate market will be dead.

Advertisements