As I noted last week, the Mortgage Bankers Association's (MBA) weekly applications index is probably not a good measure of mortgage issuance at present. First, the MBA's membership almost certainly underrepresents the subprime market, in which the largest downturn has taken place. Second, and perhap more importantly, many more applications are rejected today than a year ago. The Post has an article making this second point this morning. T Ordinarily, the weekly applications index is a timely measure on the state of the housing market since it reports weekly data with just a one week lag. Unfortunately, it is not a useful measure in the current market.
--Dean Baker
