Mortgage applications do not tell us much

The mortgage application index was 2.8 percent but it really is not telling us much at this point. Housing still has a long way to go to recovery and the there are other more important drivers in the economy such as trade growth and consumer balance sheet adjustments which provide more information on the overall direction of the economy.

The mortgage world has changed. Look at what was going on 7-10 years ago when the boom really hit. Application growth was crazy. It slowed as we topped in the housing cycle. There was a large increase when rates fell and many of the government programs started to kick-in but now a low mortgage or tax rebates are small gains relative to whether you will have a job or there will be in an increase in taxes.