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March 27, 2013

Pending Home Sales Fall Slightly. Mortgage Applications Bouncy.

March 27, 2013

Pending Home Sales Fall Slightly. Mortgage Applications Bouncy.

Mortgage Applications (week ended 3/22/2013)

– Purchase Index Week/Week +7.0%.  Previous weeks were -4.0%, -3.0%, +15% and -5%.

– Refinance Index Week/Week +8.0%. Previous weeks were -8.0%, -5.0%, +15% and -3.0%

– Composite Index Week/Week +7.7%. Previous weeks were -7.1%, -4.7%. +14.8% and -3.8%.

The refinance index, generally, is a reflection of rates falling or rising.  The purchase index is more important because it reflects the health of the housing sector.

If you can detect a trend in this data, please let me know.

Pending Home Sales (February 2013)

– Pending Home Sales Index Month/Month -0.4%.  Previous revised from +4.5% to +3.8%.

The Pending Home Sales decline was foreshadowed by the recent weak Mortgage Applications data.

I believe that we are seeing an increase in inventory as more homes come on the market. Supply was +9.6% in February. More homes are coming onto the market because prices are up and fewer people are underwater. In economic terms, supply is regaining elasticity.  The effect should be to keep prices flatter.

You can follow my commentary on Twitter @dicklepre