In the first quarter of this year, the Case-Schiller U.S. National Price Index was 2% higher than in the same quarter a year earlier. Many housing market analysts concluded from this statistic that the housing market was stabilizing. Let’s see whether the really significant numbers support such a conclusion.
Home Sales Are Now Tanking
Each week, the Mortgage Bankers Association (MBA) releases a “seasonally-adjusted” index of mortgage loan applications. Five weeks after the April 30 expiration of the first-time buyer tax credit, the unadjusted figure for purchase loan applications was down 49%. The figure for the first week in June was 44% lower than the year earlier number. In fact, the unadjusted index has been lower than the year earlier figure throughout 2010. It appears certain that the tax credit has indeed pulled home sales from the future. (more)
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