by Calculated Risk on 4/19/2006 11:13:00 PM

Thanks to Anon in the comments of the previous post, here is a longer term graph for the MBA Purchase Index.


Click on graph for larger image.

Note: This slide is from the MBA Economic Presentation on Feb 22, 2006.

The Purchase Index YTD average is 420.0, compared to the 2005 YTD of 444.3. That is a decline of just over 5%. However, over the last 6 to 7 weeks, the MBA Purchase Index has averaged about 11% less than the comparable period one year ago.

This is about the decline that David Berson, Fannie Mae Economist, is projecting in his April Forecast for the rest of the year:

Home sales are projected to fall by nearly 10 percent in 2006 in reaction to investor pullbacks and lower affordability."

A home sales decline of 10% would probably not have a serious impact on the overall economy in 2006. I think a sales decline of 20% or more would have significant economic consequences - but we haven't seen that yet in the MBA numbers.

Since Feb 22, the Purchase Index has been around 400. Here is the data not included on the chart:

Date	Purchase Index	4-Week Average
Feb 24, 2006	400.8	406.6
Mar 3, 2006	399.0	400.1
Mar 10, 2006	403.0	402.9
Mar 17, 2006	393.6	399.1
Mar 24, 2006	404.1	399.9
Mar 31, 2006	438.2	409.7
Apr 7, 2006	417.7	413.4
Apr 14, 2006	407.4	416.9

UPDATE: DoctorWho points to this chart from Fannie Mae:

The first chart is mislabeled by the MBA - it starts in 2000. The second chart provides the MBA index since 1990 and shows how the Purchase Index tracks home sales.