There were some headlines this week that are making my head spin.
1) Sales of new one-family houses in April 2010 were at a seasonally adjusted annual rate of 504,000 ... This is 14.8 percent (±19.5%)* above the revised March rate of 439,000 and is 47.8 percent (±26.0%) above the April 2009 estimate of 341,000.
2) Purchase Mortgage Applications hit 13 year low. The seasonally adjusted Purchase Index decreased 3.3 percent from one week earlier and is the lowest Purchase Index observed in the survey since April 1997.
3) Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 7.6 percent to a seasonally adjusted annual rate of 5.77 million units in April from an upwardly revised 5.36 million in March, and are 22.8 percent higher than the 4.70 million-unit pace in April 2009.
Maybe I'm just bad at math, but how do new sales increase 14.8% (I love the +/- 19.5% margin of error), existing sales increased YET applications for a mortgage fell to a 13 year low??? Are we to believe more people are paying cash for homes. I doubt that's the case. Looks to me like another fine example of making up numbers to make the sheep feel better.
7 comments:
This in turn is dropping the interest rates again. Just when everyone expected them to rise (and they did for a month or two), the stock markets throw some fuel on the real estate market.Gaithersburg Homes for Sale
I understand the frustration; the problem is they don't explain things clearly. Mortgage applications are typically reported week to week, while home sales are "completed sales" from last month. The opposite can occure, we can have a drop in home sales and an increase in mortgage apps as people run out to buy homes with 20% down and excellent credit scores...ok, maybe not so much on that last part.
Mortgages include refis as well as new purchases. Last month we had rates going up, driving down refis, even as the house credit expiration drove up sales. So fewer total mortgages along with more house sales as a result of plummeting refi rates.
The numbers though was just New Purchase applications. Rates have been dropping for the last month and they are now the lowest i a long time. I suspect Refi's will pick up.
I just bought a condo in Palm Springs. (Close in June.) My agent told me that there have been a lot of cash purchases lately.
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