IDEAS home Printed from https://ideas.repec.org/a/fip/fedder/y1996iqivp21-30.html

Can mortgage applications help predict home sales?

Author

Listed:
  • John V. Duca

Abstract

In this article, John Duca finds that the Mortgage Bankers Association (MBA) index of home mortgage applications can help forecast home sales. Alone, the index is a good, albeit imperfect, predictor of total home sales. But when included along with housing affordability and real, after-tax mortgage rate data, the index does not add extra information if one disregards differences in data release lags. ; The index is available roughly three to four weeks ahead of the two alternative indicators. Taking into account its greater timeliness, it provides some extra information on home sales beyond that in the two other indicators considered. Given this qualification, the MBA index can help predict overall home sales. In addition, the long-run equilibrium relationships suggest that its usefulness may increase in the future. Nevertheless, the index should be used cautiously. It is still relatively new, and evidence suggests it may be misleading under some circumstances.

Suggested Citation

  • John V. Duca, 1996. "Can mortgage applications help predict home sales?," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q IV, pages 21-30.
    • Handle: RePEc:fip:fedder:y:1996:i:qiv:p:21-30
    as

    Download full text from publisher

    File URL: https://www.dallasfed.org/~/media/documents/research/er/1996/er9604c.pdf
    File Function: Full Text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
    2. George A. Kahn, 1989. "The changing interest sensitivity of the U.S. economy," Economic Review, Federal Reserve Bank of Kansas City, vol. 74(Nov), pages 13-34.
    3. Jeffrey C. Fuhrer & Eileen Mauskopf & Peter A. Tinsley, 1990. "The transmission channels of monetary policy: how have they changed?," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Dec, pages 985-1008.
    4. John L. Goodman, 1987. "Housing and the Weather," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 15(1), pages 638-663, March.
    5. Duca, John V., 1996. "Deposit Deregulation and the Sensitivity of Housing," Journal of Housing Economics, Elsevier, vol. 5(3), pages 207-226, September.
    6. Hirotugu Akaike, 1969. "Fitting autoregressive models for prediction," Annals of the Institute of Statistical Mathematics, Springer;The Institute of Statistical Mathematics, vol. 21(1), pages 243-247, December.
    7. Stock, James H & Watson, Mark W, 1993. "A Simple Estimator of Cointegrating Vectors in Higher Order Integrated Systems," Econometrica, Econometric Society, vol. 61(4), pages 783-820, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Matiur Rahman & Muhammad Mustafa, 2017. "Okun’s law: evidence of 13 selected developed countries," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 41(2), pages 297-310, April.
    2. Erenburg, S. J. & Wohar, Mark E., 1995. "Public and private investment: Are there causal linkages?," Journal of Macroeconomics, Elsevier, vol. 17(1), pages 1-30.
    3. Judith A. Giles & Sadaf Mirza, 1999. "Some Pretesting Issues on Testing for Granger Noncausality," Econometrics Working Papers 9914, Department of Economics, University of Victoria.
    4. Tang, Chor Foon & Tan, Eu Chye, 2015. "Does tourism effectively stimulate Malaysia's economic growth?," Tourism Management, Elsevier, vol. 46(C), pages 158-163.
    5. Ansgar Belke & Robert Czudaj, 2010. "Is Euro Area Money Demand (Still) Stable? Cointegrated VAR Versus Single Equation Techniques," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 56(4), pages 285-315.
    6. Neil R. Ericsson & James G. MacKinnon, 2002. "Distributions of error correction tests for cointegration," Econometrics Journal, Royal Economic Society, vol. 5(2), pages 285-318, June.
    7. Ramona Dumitriu & Razvan Stefanescu, 2015. "The Relationship Between Romanian Exports And Economic Growth After The Adhesion To European Union," Risk in Contemporary Economy, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, pages 17-26.
    8. Jacobson, Tor & Ohlsson, Henry, 1994. "Long-Run Relations between Private and Public Sector Wages in Sweden," Empirical Economics, Springer, vol. 19(3), pages 343-360.
    9. Sohail Abbas & Shazia Kousar & Amber Pervaiz, 2021. "Effects of energy consumption and ecological footprint on CO2 emissions: an empirical evidence from Pakistan," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(9), pages 13364-13381, September.
    10. Arize, Augustine C., 2002. "Imports and exports in 50 countries: Tests of cointegration and structural breaks," International Review of Economics & Finance, Elsevier, vol. 11(1), pages 101-115, April.
    11. Bunzel, Helle, 2006. "FIXED-b ASYMPTOTICS IN SINGLE-EQUATION COINTEGRATION MODELS WITH ENDOGENOUS REGRESSORS," Econometric Theory, Cambridge University Press, vol. 22(4), pages 743-755, August.
    12. Anderson, Richard G. & Hoffman, Dennis L. & Rasche, Robert H., 2002. "A vector error-correction forecasting model of the US economy," Journal of Macroeconomics, Elsevier, vol. 24(4), pages 569-598, December.
    13. Takashi Miyazaki & Shigeyuki Hamori, 2014. "Cointegration with Regime Shift between Gold and Financial Variables," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 5(4), pages 90-97, October.
    14. Alola, Andrew Adewale & Akadiri, Seyi Saint, 2021. "Clean energy development in the United States amidst augmented socioeconomic aspects and country-specific policies," Renewable Energy, Elsevier, vol. 169(C), pages 221-230.
    15. H.J. Smoluk & John Voyer, 2014. "The spirit of capitalism among the income classes," Review of Financial Economics, John Wiley & Sons, vol. 23(1), pages 1-9, January.
    16. Sakib Bin Amin & Farhan Khan & Mashiyat Rafa Khan & Jaahin Azam Oyishi, 2023. "The dual economy paradox: the case of Bangladesh and India," SN Business & Economics, Springer, vol. 3(9), pages 1-22, September.
    17. Gökgöz, Fazıl & Yücel, Öykü, 2025. "Measuring the long-term impact of wind, run-of-river, solar renewable energy alternatives on market clearing prices," Renewable Energy, Elsevier, vol. 241(C).
    18. Fakhri J. Hasanov & Muhammad Javid & Frederick L. Joutz, 2022. "Saudi Non-Oil Exports before and after COVID-19: Historical Impacts of Determinants and Scenario Analysis," Sustainability, MDPI, vol. 14(4), pages 1-38, February.
    19. Addison-Smyth, Diarmaid & McQuinn, Kieran & O'Reilly, Gerard, 2009. "Modelling Credit in the Irish Mortgage Market," The Economic and Social Review, Economic and Social Studies, vol. 40(4), pages 371-392.
    20. Yash P. Mehra, 1995. "Some key empirical determinants of short-term nominal interest rates," Economic Quarterly, Federal Reserve Bank of Richmond, issue Sum, pages 33-51.

    More about this item

    Keywords

    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedder:y:1996:i:qiv:p:21-30. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Amy Chapman (email available below). General contact details of provider: https://edirc.repec.org/data/frbdaus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.