The Mortgage Bankers Association (MBA) released the latest mortgage data this morning. Bad news abounded. As a result of rates moving up over their record lows of around 4.6% a few weeks ago, all leading mortgage indexes fell. Applications fell by 15.8%, Refinance fell by 23.3% and purchase applications dropped 3.5%. This is a significant reversal from the March rise.
The raise in rates was triggered by the bond market pushing the yield on the then year note up to 4%.
This trend must be reversed immediately for the Fed’s recovery plan to work. This issues is only compounded by crude oil moving back to $70 a barrel.
The March rally seems to have rolled over. Real estate brokers have until September to build enough reserves to make it through another harsh winter of losses. Our industry may be facing the most significant contraction of brokerages in history beginning in November-February. Big brokers and leading franchises who faced tremendous losses last winter will need to find new financing partners to survive. Our greatest strength may be in our real estate agents who are unlikely to abandon real estate and enter the increasingly sluggish job market – indeed this may be a great recruiting season for new agents.