As the month of December and holidays wrap up, appraisal volume recorded a 14.1% drop for the week of Dec. 18, according to the latest report from a la mode.
This is a significantly bigger drop than the 3.8% decline posted in the previous report.
Despite the decline, the four-week average still increased and rose to 3.3% since the week of Thanksgiving Day.
However, it’s important to keep in context how the holidays are impacting volume.
The report noted that with Christmas falling on the weekend, most of the holiday slump occurred the week before.
Since 2006, al la mode said the week before Christmas has had a normal drop of around 7%. In 2011, when Christmas fell on a Sunday, like this year, the drop was 12.9%.
Keeping this in mind, the average Christmas drop for the week before and the week containing the holiday is around 40%, implying a 25% to 30% drop next week if history bears out.
Check the chart below, which is exclusively provided to HousingWire, to see appraisal volume over the past four weeks.
Click to enlarge
(Source: a la mode)
Appraisal volume is an indicator of market strength and holds some advantages over weekly mortgage applications.
For example, fallout is less for appraisals since they are ordered later in the mortgage process, after creditworthiness is determined, and there are few multiple-orders, by the time an appraisal is conducted.