Expect purchase application data to be negative in 2H 2021
Logan Mohtashami HousingWire Lead Analyst
When economic data that is typically sticky has a waterfall dive followed by a quick parabolic recovery, forecasting a trend can be tricky. The MBA purchase application data changed during our year of COVID-19.
In a typical, non-pandemic year, the bulk of the volume of purchase applications occurs in the heat months for housing, those being the second week of January to the first week of May. By the end of May, purchase application volumes start to fall. Every year, we get some rookies that think the post-May decrease means that housing is crashing. Don’t be one of those.
When we keep this data line’s seasonality in mind, we can get a pretty good picture of the housing market’s health. When the housing market isn’t doing great, purchase application data shows negative year-over-year data for the entire year. The last time we had a negative year-over-year decline in purchase applications was in 2014. That year purchase applications were the lowest ever when adjusted to the population.
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