Tuesday, September 4, 2007

Previous Mortgage Origination Readjustments

It's a two post day because I'm out of town tomorrow and Thursday.

I was digging through mortgage origination data and found this interesting paper co-authored by some guy named Alan Greenspan. The paper uses the available data to suss out mortgage originations.

Purchase origination volume has been pretty steady over this time period (this is annual data.) But refinance has had its ups and downs. This seems pretty intuitive: when you have to buy a house, you have to buy a house, but you refinance when the stars align (i.e. lower interest rates, better investments elsewhere.)

Note the two downturns in refinance volume shown in the chart: in 2000 and 2004. Now think back to the online mortgage lead market in those years... I know it was a long time ago... think, think... internet years are so long...

Here's a hint: in 2000 LendingTree's revenue almost quintupled. And everyone here remembers 2004 and the ginormous growth in volume.

I know this is all circumstantial and the past is no predictor of future returns and you get what you pay for, and I'm not getting any investment bank analyst job offers (that's not a solicitation, btw. Ugh. Uh, unless you're paying a LOT), etc. But I haven't found any data to contradict my point. I mean, aside from IACI going from $40 to below $30. But, hey, who knows what goes on at IAC anyway?

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