Unfortunately the mortgage application data came out on a day when the Federal Reserve was controlling the headlines. The mortgage application data indicated the largest two-week rate of decline in mortgage applications since the housing bubble popped.
Furthermore, this is supposed to be a strong seasonal time for real estate and interest rates are rising as shown above. If readers look at recent price action in the Spiders Homebuilders ETF (XHB) or Home Depot (HD) it would appear that all is well in the land of housing and Chairman Bernanke and the Federal Reserve are spot on with their bullish analysis.
Until the past few trading sessions, the homebuilders have been in an obvious bullish run to the upside. The rally that transpired since the late February 2013 lows tacked on close to 20% gains in XHB. However, as noted above, the past few trading sessions’ price action appears to have stagnated and we saw new recent lows on Wednesday.