Mortgage applications declined sharply in the past month, plummeting year-over-year and seeing a small but still pronounced decline from the prior month.
Applications for new home purchases “decreased 27.4 percent compared from a year ago,” the Mortgage Bankers Association said in its weekly application report. Meanwhile, compared to June 2021, applications decreased by 4 percent.”
MBA Associate Vice President of Economic and Industry Forecasting Joel Khan suggested the steep drop is not as dire as it initially appears.
“Mortgage applications for new home purchases declined in July – as is typical most summers when home sales start to moderate – but did come in at the second-strongest July reading since the inception of MBA’s survey in 2012,” he argued in the release. “Furthermore, the average loan size again increased to a new record of $402,440.”
“After adjusting for seasonal patterns, our estimate of annualized new home sales showed a jump of more than 10 percent from June,” he continued. “The housing market is still extremely competitive, and prospective buyers have increasingly turned to newly built homes because for-sale inventories remain so low.”