Fed Rate Cuts: Re-fi's Abound But Where Are Buyers?

Fed Cut and Mortgage
Fed Cut and Mortgage

For several weeks now the survey of loan applications from the Mortgage Bankers Association has been telling the true story of today’s housing market. Lower mortgage interest rates are not in fact pushing people to buy homes; instead, they’re spurring current owners to refinance.

I like to look at the four-week moving average that the MBA offers, because it gives a truer sense of the marketplace without the sudden jolts. The four-week average in total is up 16.7 percent, but if you look inside that number, you see that the Purchase Index is up just 0.1 percent, while the Refinance index is up 29.3 percent.

Currently, the refinance share of mortgage activity is up to 73 percent of total applications, up from 66 percent just the week before.

These numbers say to me, far more than any other stat I have to spew, that it’s going to take a whole lot more than a Fed rate cut and a fall in home mortgage rates (adjustable, home equity or other) to get this housing party started again. I feel like it’s turning into my mantra, but housing today is all about confidence, and the mortgage numbers prove it.

The only thing homeowners are confident about today is that they’re not moving anywhere any time soon, so they might as well make their current place as mortgage efficient as possible for the foreseeable future.

Questions? Comments? RealtyCheck@cnbc.com