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Mortgage applications at 2-decade low

  • "Purchase applications were little changed on an unadjusted basis last week, but this is the time of a year we would expect a significant pickup in purchase activity, and we are not yet seeing it," says the MBA's Mike Fratantoni, commenting on the latest mortgage application data.
  • Overall applications slipped 8.5% for the week, led by an 11% drop in refinances.
  • The seasonally adjusted purchase application index fell 4% from a year ago to the lowest level since 1995. Bad weather is a convenient excuse, but Diana Olick notes January home sales fell the most in the West where weather was not a factor.
  • "We're going from an investor-led housing market to an end user-led housing market, and that's creating a lot of problems," says housing analyst Mark Hanson.
  • A few names to keep an eye on include: Wells Fargo (WFC), PennyMac Financial Services (PFSI), Nationstar Mortgage (NSM).
Comments (25)
  • Going from an investor-led to an end user-led market is a good thing in the long run. The conceit that homes are investments led to massive capital misallocation and shows that our financial system is slowly getting its sanity back. We don't need any more bankers.
    26 Feb, 09:48 AM Reply Like
  • The funny thing is that in most cases, the price the end-user is willing and able to pay is the same price they would have paid a few years ago, before the investor outbid them with a cash purchase. If these investors think they are going to make 20%+ returns on their real-estate holdings they are delusional. They will be lucky to get out of most properties with just a small loss.
    26 Feb, 12:32 PM Reply Like
  • WFC dropped the credit number from 645 to 600 to qualify for FHA loan, and fired a bunch of mortgage people recently. If that doesn't suggest a mortgage slowdown, what does?
    26 Feb, 09:51 AM Reply Like
  • The seasonally adjusted Purchase Index lowest level since September of 2011. The unadjusted Purchase Index was 17 percent lower than the same week one year ago.
    26 Feb, 10:00 AM Reply Like
  • There are no JOBS! We are killing job growth with rules, regulations and ObamaCare
    26 Feb, 10:20 AM Reply Like
  • BlueOkie: IBM currently has 800 U.S. positions they can't fill because of lack of appropriate education and technical skills (IBM is just one of many examples). We are killing jobs due to our poor and outdated public education system.


    Click for an interesting read (and source for my IBM statistic above):
    26 Feb, 11:21 AM Reply Like
  • That's an excuse. There are plenty of qualified people. Nobody is hiring because that's part of the business plan for dealing with the current (really past, with a bias born out of the recession) economic environment.
    26 Feb, 11:45 AM Reply Like
  • sbeardsley: You are correct. That is definitely another aspect of it, but certainly not the complete picture. Think about it: why would IBM publicly state they have 800 positions they want to fill, contribute money to Chicago's P-Tech program, and guarantee $40,000 starting salary to all P-Tech graduates?


    See IBM's commentary on the P-Tech program and their blueprint for a national plan for other companies and school systems to follow:


    Americans need to realize that a high school diploma won't get you squat anymore and they need to stop thinking they are simply entitled to jobs because they are Americans. There are plenty of more skilled foreigners that can come in and do the jobs that Americans are too dumb to fill.
    26 Feb, 11:53 AM Reply Like
  • Well yesterday Seeking Alpha ran an article that today IBM will start laying off up to 13,000 of it's employees. To check this for yourself, put in the IBM ticker on Seeking Alpha and go to breaking news. The report is right there on the Feb. 25, 2014 date for all to see.


    So, even if the 800 positions you reference were filled tomorrow, then there would still be 12,200 positions reduction at IBM. Now add in all the layoffs at mortgage bankers that have recently been announced. Does the article you referenced reconcile the differing signals emanating from these reports?


    Minuteman, I'm afraid you're falling for the propaganda issued by the Chamber of Commerce who is campaigning for increased visas for foreign workers. The C of C is supporting the effort by Tech and Big Business to bring in lower paid foreign workers to replace higher paid American born, raised and educated engineers. You tell me how that is going to help our economy, going forward.
    26 Feb, 12:03 PM Reply Like
  • Nonsense. There are IT programs in colleges/universities all over the USA and Canada putting out graduates every year. It's not hard for IBM to contact them and ask them to advertise available positions. If IBM has such specific education requirements that many of these programs are missing those skills, they could inform the schools at the same time what they are missing from their curriculum. Problem solved in 1-2 years with courses made available for this purpose, because those schools would fight to be able to advertise they had many graduates go on immediately to IBM.


    Was that hard to figure out? I guess I should be working for IBM.
    26 Feb, 03:03 PM Reply Like
  • pim69: As I already stated above, this is exactly what IBM is doing with the P-Tech curriculum. P-Tech is 6-year high school program where graduates come out with an Associate's Degree. IBM guarantees jobs for P-Tech graduates with minimum starting salaries of $40,000.




    P-Tech is not just for IBM. See more info on P-Tech here:
    26 Feb, 03:17 PM Reply Like
  • Outdated public education has nothing to do with it. You think those foreigners all come from Norway with excellent school systems? The public education systems in the countries these people are coming from are worse than ours.


    The state of the public education system means nothing when Americans choose to major in art history. IBM doesnt need liberal arts majors.
    26 Feb, 03:30 PM Reply Like
  • You ever walked into an IT or CS school at a major university? It's pretty much mostly foreigners. The homegrown US students are in the sociology and women's studies classes.
    26 Feb, 03:32 PM Reply Like
  • First of all, I don't think $40,000 is a very good starting salary for a company as large and successful as IBM, particularly for a student who participated in a program tailored specifically for their needs. In my mind this lends support to another person's suggestion that IBM is seeking to pay the lowest salaries possible while gaining needed skills with only a 2 year post-highschool program (since highschool is 4 years). This may focus the students skills too much to be less marketable to other companies in the industry if it's so IBM centric.


    I don't understand your statements at all th3decider. Useless university programs are not new. Any person can choose any program they wish. How do you know which students are first, second or third generation+ Americans, or foreign exchange students, just by looking at them? Frankly it does not matter, IBM's statements lead us to believe the schools themselves are not providing adequately educated students. It does not matter if they are "foreign" (whatever that means to you).
    26 Feb, 04:06 PM Reply Like
  • minuteman...try paying for the qualified.
    26 Feb, 04:40 PM Reply Like
  • Minutemen, IBM is cutting between 3,000 and 10,000 jobs. Have they heard of retrainng
    26 Feb, 05:53 PM Reply Like
  • Lakeaffect: Note that those numbers are worldwide figures, not U.S., and its important to note that many of those "layoffs" are job transfers, e.g., more than half (7,500) will shift payrolls from IBM to Lenovo (due to Lenovo's $2.3 billion purchase of IBM's x86 server business). So it is a more complicated issue that your comments indicate, and it doesn't negate the fact that U.S. applicants lack the skills of many of the positions IBM is trying to fill.
    26 Feb, 12:11 PM Reply Like
  • Minute, if the employees exist in another part of the world but do not exist here in America, then IBM is free to hire them over there. There is no need to import people who will undercut the wages of people already working here doing those same jobs.


    I have a close friend in the tech placement business. His constant reminder to me is that there are plenty of qualified people out there, but the businesses don't want to pay them what they're worth. They would rather undercut their wages by importing foreigners who are willing to work for much lower wages.


    This is myopic thinking on the part of business as reducing the standard of living of the American worker does nothing to bolster their businesses in the long run.


    With regard to the layoffs of the 13,000 workers at IBM, are you saying that none of these will happen in North America? Are they all being transferred to Lenovo? I don't think so, on either count. And you don't address how in that 13,000 employees there aren't 800 who could take on the jobs that, as you state, Americans are just too unqualified to handle.
    26 Feb, 01:01 PM Reply Like


    Anecdotal. I hear that all the time, but its just not true. Sure, there are well-qualified U.S. workers, but unfortunately there aren't enough. I personally work in a STEM field (science, technology, engineering and math) and find it quite depressing that U.S. graduates often don't have the same level of skills and education that foreign students have. And yet, these same U.S. students demand higher wages for work that can readily be performed better by foreign employees at lower wages. So why should U.S. employers take on Americans at higher wages when they can get just as good or better talent for cheaper?


    How to fix the income inequality? Answer: Open the gates and completely eliminate immigration quotas. That would reduce higher salaries in the U.S. and lead to normalization in salary disparity.
    See Alan Greenspan's ideas on this:
    26 Feb, 01:34 PM Reply Like
  • I work in HR and I will you Minutemen is correct that we have a skills and education gap in this country. Why do you think CEO's of technology companies are pushing for Immigration visa reform?

    26 Feb, 12:54 PM Reply Like
  • HR guy - For the answer to your question, I refer you to my responses to Minuteman above.


    And soon, you'll have 13,000 more to choose from.
    26 Feb, 01:04 PM Reply Like
  • Also, there are a large number of ex-RIM employees looking for work. RIM + IBM layoffs plus a multitude of USA/Canada universities and colleges can't possibly provide less than 800 qualified applicants for IBM.


    I think sometimes a given company may get stuck expecting the same skills from an employee they lost, who worked with them for 5-10 years, to be available from someone fresh out of school. I find it hard to believe there are NO technology institutions teaching a generalized version of the specific skills needed for any given role. You can't expect someone who has been taught by a school who is trying to give them a broad spectrum of skills for employment, to be immediately fully trained for a specific position with very specific skills.
    26 Feb, 03:22 PM Reply Like
  • Good point, pim. Maybe the imbalance is also exacerbated by the exponential increase in the cost of that higher education. I can see where an employer's high expectations for quick ramp up times is desirable, and also where a college grad's expectations for a higher starting salary are driven by that $50K in student loans staring them in the face. Would there be such a disconnect if a good summer job paid for two semesters of university like it once did and a college grad with little debt would consider $40K a fair start, and employers would hire them with an expectation that with many that $40K would be a loss?
    27 Feb, 12:55 AM Reply Like
  • It depends on the timeframe we're discussing. If 2 years ago the same applicant was $40k and is now $50k, or if it was 20 years ago, inflation could make this difference a wash.


    It's also sad that education is costing more, but now such a large portion of the population has post-secondary education we hear more and more people having trouble with employment. The more expensive diploma/degree is becoming less valuable for guaranteed employment.
    2 Mar, 05:01 AM Reply Like
  • If companies like IBM require special skills, wouldn't it make sense for them to develop their own "IBM University" that teaches to their specific requirements, and offer scholarships to students to become prospective employees? Perhaps, as in the military, they could require two to four years of employment at the company after graduation, or the student would have to reimburse the scholarship. The students could graduate with little or no debt, learn the company culture, and be ready to contribute from day one of their employment. Also, because they would have no student debt, they could accept a lower income for the first few years.
    1 Mar, 03:27 AM Reply Like
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