"Weakening Demand for Mortgages Across the Board"

Burried in a WSJ article today on credit standards for subprime loans, was a very juicy tidbit. According to the Federal Reserve survey of banks "almost a third of the banks surveyed had experienced lower demand for mortgages of all types over the past three months regardless of the loan category."

It should be noted that this is the exact same data economists were using to call a bottom to the market in January when these applications were showing signs of life. I take this news as a healthy indicator that we are no where near the bottom.

This also brings up another secret theory of mine (well I guess its not so secret now). Housing trouble will hit all segments of the market. While I think the move-up theory holds some weight (if first time buyers can't buy, then others can't move up)....I think there are bigger, more structural issues in play, related to family income and expense ratios. Everyone seems to be blaming their housing slump woes on subprime......but this bubble deflating was going to happen regardless. Subprime just exacerbated the situation and made it come to a head as opposed to a slower unraveling. Affordability affects everyone, not just subprime. My theory was boosted last week when Toll Brothers, supposedly a more upscale builder, reported lower than expected profits.

Separately, I tracked down the article on "the Realignment of America" from Tuesday's (May 8ths) WSJ. He basically categorizes metro areas based on population inflows and outflows (and who makes up those flows, Americans or immigrants). Sacramento was listed as part of the shifting center of gravity, one of the interior boom towns.