August 24th, 2011
Econintersect: The quote of the week came from the Mortgage Bankers Association's (MBA) large drop in purchase applications for the week ending 19 August 2011:
"Another week of volatile markets and rampant uncertainty regarding the economy kept prospective homebuyers on the sidelines, with purchase applications falling to a 15-year low," said Mike Fratantoni, MBA's Vice President of Research and Economics. "This decline impacted borrowers across the board, with purchase applications for jumbo loans falling by more than 15 percent, and purchase applications for the government housing programs (FHA, VA, and USDA) falling by 8.2 percent. Although mortgage rates remain quite low, they increased over the week, bringing refinance application volumes down slightly."
Altos Research has published its mid-sized cities report on home prices and inventory for July 2011. This index covers smaller sized cities than Case-Shiller. The mid-cities composite experienced no relevant change in median
prices in July, and a very slight contraction of inventory.
As we analyze mid-sized cities like Pittsburgh and Memphis, differences continue to emerge as compared to the S&P/Case-Shiller 20-city composite.
“Price of New Listings” and “Percent Price Decreased” are two of our most leading indicators of future transaction prices and volume.
Price of New Listings are up slightly while this indicator remains in negative territory for the Case-Shiller markets:
Price Reductions – measured as the number of active listings with at least one price reduction in the most recent 90-day period – are lower in the Mid-Cities Composite, inching into negative ground in the last two months (a good thing – fewer price reductions usually means stronger demand on a relative basis):