In yet another sign of the economic crisis, the Mortgage Bankers Association said Wednesday that mortgage applications plunged 23% last week.The credit freeze has also had an adverse effect on auto sales:
The MBA said its seasonally adjusted index of mortgage application activity dropped to 455.4 in the week ended Sept. 26, down from 591.4 the prior week.
Turmoil in the banking and finance industries has resulted in a credit freeze, making it difficult for prospective homeowners to take out loans. The market is also experiencing a glut of foreclosures. ...
The association also reported steep declines in other weekly indexes tracking housing finance.
The refinance index plummeted 34.7% to 1333.9 from the prior week. The seasonally adjusted purchase index fell 10.9% to 304.8.
Sales at the nation's top automakers fell sharply in September, as tighter credit for buyers and dealers combined with high fuel prices to curtail demand for cars and trucks.
The sales declines were broad based, with Japanese automakers reporting the same kind of double-digit declines that hit U.S. brands earlier this year when the record gasoline prices sent buyers scurrying from SUVs and pickups to more fuel efficient car models.
This time it was the credit crisis, not just gas prices, that cut into sales. Many buyers were unable to get the credit they needed to buy a car and a growing number of dealers saw their own credit cut off, causing widespread failures.
Add to that general nervousness about the economy and the industry was poised to sell fewer than a million cars in the United States for the first time since 1993. And auto executives say they don't think they've seen the bottom yet.