Scary stuff for a Fed chairman who sees asymmetrical risk to the downside.
By Diana Olick
Total mortgage applications are down 56 percent from a year ago, with the plunge in refinances leading the way. Purchase applications though are down 10 percent, mirroring a slowdown in home sales in many previously hot markets.
California Realtors reported Tuesday that November sales fell 15 percent in Los Angeles and 13 percent in San Francisco year over year.
With credit still tight, and Fannie Mae and Freddie Mac announcing fee hikes, fewer borrowers can afford a home loan.
Compounding this, the government’s mortgage insurer, the Federal Housing Administration, has lowered loan limits in hundreds of local markets starting in 2014. That will make thousands of potential borrowers ineligible.
The share of all-cash buyers remains high, accounting for more than one-third of home sales in October, according to the National Association of Realtors.
Same number of all cash buyers is a higher percentage of the lower total 😉