Finger on the Pulse of Residential Housing Demand – Mortgage Applications

Housing prices will not rise without demand from buyers.  While a growing number of residential homes are being purchased for cash via institutional investors and wealthy foreign buyers (China/Asia) most homes still require mortgage financing to complete the purchase transaction with the seller.  As such, the number of new mortgage applications is a very good indicator of demand for residential housing.  Get the ‘paddles’ ready, the residential housing market needs resuscitation.

Per the chart below courtesy of Bloomberg, the three month rate of change in Mortgage Applications reflects the fastest decline in applications since June of 2009.  On an absolute basis, mortgage applications are at their lowest level in two years.

Absent resurgence in demand for housing and mortgage loans to fund the purchases, price declines in residential real estate are likely.  As in my recent blog ‘Home, sweet… or not so sweet, home’ (https://christinemederaccountingadvisory.wordpress.com/2013/07/27/home-sweet-or-not-so-sweet-home/) I reiterate my view that housing prices are peaking and heading lower and am recommending that my clients act accordingly.  Are you prepared to see the value of your property return to the lows experience in the last five years?  Expect the unexpected.

If you’d like additional clarity into your specific equity holdings and the financial or housing markets in general, please contact me at Christine Meder’s Accounting Advisory Services mederchristine1526@gmail.com or tweet me at @christinemeder1.  I’m offering a free 30 minute consultation through the end of August.  #unrbrand

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About Christine Meder
Leveraging my insights and professional experience of 25 years in the accounting profession, I and my firm Christine Meder's Accounting Advisory Services provide our high net worth clients expert advice on their business activities and investments. In addition to performing traditional accounting functions in a confidential manner, I pride myself in giving clients a competitive edge whether it be in running their businesses or managing their investment portfolio. My studies leading up to completion of the EMBA program at the University of Nevada, Reno this August provide me with latest skills and techniques utilized across a broad spectrum of business functions. This breadth of education is complemented with experience as an accountant in the construction, mining, real estate and technology fields during my career. If you are looking for a trusted adviser or consultant in addition to someone you can rely on to properly keep your books, please contact me.

2 Responses to Finger on the Pulse of Residential Housing Demand – Mortgage Applications

  1. Pingback: Mortgage Rule Changes: A year later | Kentucky First Time Home Buyer Mortgage Loan

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