(Washington Post) -- JPMorgan Chase and Wells Fargo, the nation’s largest banks, reported Friday a decline in applications for home loans, a sign that the strength of the housing recovery may be waning.
(Washington Post) -- JPMorgan Chase and Wells Fargo, the nation’s largest banks, reported Friday a decline in applications for home loans, a sign that the strength of the housing recovery may be waning.
The report was the latest worrisome indicator for the economy. The government on Friday said retail sales declined 0.4 percent last month, which was worse than expected and the biggest decline in nine months. The government also reported this month a dramatic slowdown in job creation.
Housing has been seen as one of the recovery’s bright spots. But on Friday, JPMorgan and Wells Fargo reported that the volume of their mortgage applications fell, even though the spring selling season is gearing up.
At JPMorgan, applications fell 8 percent in the first quarter, compared with the previous quarter, though they were up 1 percent from a year earlier. Overall revenue from its mortgage division fell 31 percent.
Wells Fargo’s mortgage applications fell 8 percent, compared with the last three months of 2012, and were down 25 percent from the first quarter of 2012.
The figures, however, aren’t a perfect measure for the health of the housing market. The two banks saw mortgage revenues fall partly because competition increased, squeezing profit margins. In addition, the record low cost of making loans — spurred by stimulus efforts by the Federal Reserve — have started to rise again.
