Demand for mortgages has been drying up. The Mortgage Bankers Association said today that the seasonally adjusted volume of applications in the week ended Dec. 28 was down 11.6% from a week earlier. (Yes, seasonal adjustment takes into account the fact that fewer people apply for mortgages around Christmas.) The index was down 20% from the same period a year earlier.
Breaking it down, applications for mortgages to purchase a home fell 8.5% from a week earlier, seasonally adjusted, while the refinance applications fell 15.4%.
Keep in mind that the 20% drop in applications from a year ago probably understates the true decline in demand for mortgages, because those people who really do want a mortgage are submitting more applications now since standards have tightened.