We started getting word in mid February that application activity was picking up a bit after what we knew were several very depressed months following the October 1st principal limit reductions. February’s numbers did indeed show a slight bump in app volumes on the heels of a new low in January, and March has continued the trend as you can see in the updated chart below (click for larger chart).
March applications came in at 7,398, up 11.4% from February. Although this is still less than half of March 2009 volume, it’s important to remember that we’re just now hitting the one year anniversary of the 625K lending limit increase that drove a mini spike in applications as we’ve highlighted on the chart above. It’s hard to believe just a year ago we were seeing dramatically positive volume boosts coming from HUD program changes, especially as we’re staring down another principal limit reduction later this year.
It’s also important to note that there are 35% fewer originators in March 2010 vs. 2009, so the impact of a 54% decline in application volumes on average applications per lender is muted down to a still scary but more manageable 29% average decline for the survivors.
We’re very interested to see what April applications bring given the pricing changes and anecdotal stories of a resulting 30-50% increases in volume over March. A 50% increase would put the industry just about back to our typical monthly volume prior to the principal limit reductions, although we would expect fewer originators and therefore a healthier posture for surviving lenders.