Demand is high, prices are higher, but the housing numbers this spring are just not adding up. Mortgage origination volumes hit their lowest recorded level since at least 2000, according to a report released Monday from Black Knight Financial Services.
The biggest volume drop is in refinances, which have fallen steadily since rates rose a full percentage point in June, but that's not the full picture. It is really about who qualifies for a loan and who does not.
"The refinances are burning out a lot faster than anticipated, but the real culprit is purchase," said Paul Miller, an analyst at FBR Capital Markets. "The purchase market has not picked up at all. It's not that the buyers are not there, it's that there is nothing to buy, and everyone is trying to figure out why."
One answer is that there are still millions of borrowers who owe more on their mortgages than their homes are worth or who have so little equity in their homes that they can't afford a move up. The other issue is credit.