MBA data shows refi plunge, lowest purchase activity in 8+ years
That is the lowest level for purchase loan applications going all the way back to the final week of December 2000. If you exclude that week, which appears to be an anomalous spike lower, (the MBA figures sometimes show large swings around the holidays due to the difficulty of seasonally adjusting the figures at that time of year), you have to go all the way back to February 1999 to find a weaker reading.
Second, the economy continues to deteriorate. We've lost almost 600,000 jobs EACH month since November. Consumer confidence has continued to deteriorate. And home prices have continued to decline. All of those factors are spooking potential home buyers, and keeping many of them on the sidelines. Cheap financing and home buying tax credits from Washington may spur some activity. But the underlying housing market fundamentals remain extremely weak. So mortgage activity will likely stay subdued as well.