Ian Shepherdson Mortgage Quotations

There is no chance of a spontaneous slowing in home sales. The market will soften if -- and only if -- mortgage rates rise significantly.

July sales always looked unsustainably high relative to the level of mortgage applications so a correction was due. This drop in sales does not mark the start of a sustained weakening.

Just about everyone who buys a house uses a mortgage, so a sustained drop in mortgage demand tells you where home sales are going, regardless of the current sales data.

Our view is that home sales will slide through the summer, dragging housing starts down into the fall. But this is still no more than a forecast; mortgage applications are still very strong.

There is, in short, no sign that the housing market has turned down, ... The lack of supply of existing homes simply means that prices will rise more quickly -- and with mortgage rates at just over 8 percent, there won't be any slowdown in home sales anytime soon.

There is, in short, no sign that the housing market has turned down. The lack of supply of existing homes simply means that prices will rise more quickly -- and with mortgage rates at just over 8 percent, there won't be any slowdown in home sales anytime soon.

The surge in activity is a lagged response to the strength of new home sales, and with mortgage demand now well off its highs -- though still strong -- it probably can't last, ... But there is no reason to expect an immediate plunge, not least because permits rose again in February, for the fourth straight month.

A serious downturn in housing activity will have to wait until there is a meaningful increase in mortgage rates, ... For that, we have to wait until payrolls take off and the Fed signals tighter policy.

The revisions are not as big as we feared, ... The new April number shows sales at their lowest level since November, but the previous four months were exceptionally strong, in part due to favorable weather. Given the strong trend in mortgage applications, these data likely do not signal real housing weakness.

In the short-term, these data will reinforce the impression that the housing market is proving resilient in the face of higher mortgage rates, ... it will not last, because the current trend in home sales is not high enough to support this rate of house building in the medium-term.

The key number in this report, in our view, is the rise in the supply of homes for sale. There are now 14.4 percent more homes for sale than a year ago, while actual sales are up just 3.3 percent. With mortgage demand slipping a bit and supply rising, price gains cannot continue at their current pace.

The renewed strength in home sales reflects lower mortgage rates; we expect rates to dip to a 14-month low this week. The housing rebound will ensure construction sector strength in the first quarter of 2001. No recession here.