6 replies to this topic

[Tor]

We just got the bank lending data for the April 18th week and residential real estate credit was down 0.2%. This was the second decline in the past three weeks and dragged the six-month trend down to a record low of 0.4% at an annual rate. Just six months ago, this pace was hovering near 20%; threemonths ago it was 15%. It's now running close to 0%. This suggests that when we get the next senior Fed loan survey for the three months to April, it probably will show even more tightening in the mortgage market than the last poll did – and that one, which was released in January, was the most restrictive since the mid- 1991 credit crunch. This is why the link between the weekly MBA mortgage applications data and home sales has all but broken down – it is completely normal to have applications surge when lending guidelines tighten because wannabe homeowners send off multiple applications to multiple lenders on the hopes that one will be accepted. So at this stage, what matters are approvals – not applications. And if the chart below has any meaningful story attached to it, it is that the tightening standards are beginning to bite into credit creation at least as far as the $10 trillion mortgage market is concerned. Since credit is like an oxygen tank for the housing market, it goes without saying that the downturn in residential real estate has further to go.

[relax]

Rates should be cut now - rather be a bit too early than too late

I think it is crucial that rates come than on wednesday - But with China and other countries having financed US debt, the US are of course under pressure to keep the dollar from the depreciating too much

We just got the bank lending data for the April 18th week and residential real
estate credit was down 0.2%. This was the second decline in the past three
weeks and dragged the six-month trend down to a record low of 0.4% at an
annual rate. Just six months ago, this pace was hovering near 20%; threemonths
ago it was 15%. It's now running close to 0%. This suggests that when
we get the next senior Fed loan survey for the three months to April, it probably
will show even more tightening in the mortgage market than the last poll did – and
that one, which was released in January, was the most restrictive since the mid-
1991 credit crunch.
This is why the link between the weekly MBA mortgage applications data and
home sales has all but broken down – it is completely normal to have applications
surge when lending guidelines tighten because wannabe homeowners send off
multiple applications to multiple lenders on the hopes that one will be accepted.
So at this stage, what matters are approvals – not applications. And if the chart
below has any meaningful story attached to it, it is that the tightening standards
are beginning to bite into credit creation at least as far as the $10 trillion mortgage
market is concerned. Since credit is like an oxygen tank for the housing market, it
goes without saying that the downturn in residential real estate has further to go.

[thespookyone]

A question-if you truly want the credit standards loosened(I guess you desire another 1 to 2 million defaults?) will you offer to pay my share of taxes to fund any bailouts that follow? Rates are low even now, by historical standards, and the "tightening" you refer to seems much more directed to the worst of the worst. I would have no problem financing a second home now, and I doubt you would either. Spooky

[raleigh]

relax dk............what part of dk are you living in?

[relax]

copenhagen....you have any connection to Denmark

relax dk............what part of dk are you living in?

[raleigh]

I use to visit there alot, i.e. friends in Charlottenlund, but not for ten years now.

[relax]

Charlottenlund is a nice place

But friends come and go in this strange life;-)

I use to visit there alot, i.e. friends in Charlottenlund, but not for ten years now.