Nowhere is this asset deflation more evident than in the markets that were directly targeted by QE: housing and mortgage lending. In the February edition of the Black Knight (formerly Lender Processing Services) Mortgage Monitor, analysts noted that mortgage originations had dropped an astounding 65% year-over-year, reaching a record low. New mortgage originations were down 22% month-over-month, and down 47% year-to-date.

With home sales and lending softening during the winter months, there has been anticipation of a springtime rebound in activity. Last week the consensus for March monthly new-home sales growth was for a gain of 2.3%, following a decline of 3.3% in February. The number came in at an astonishingly negative 14.5%, with February revised to a decline of 4.5%. Mortgage applications dropped 3.3% on the week, with purchases falling 2.6% and refis falling 3.7%. The share of applications for refinance fell to 51.3% of the total, down from 80% when QE 3 began in 2012.