Measured prior to the July 4 holiday, the number of applications to secure a purchase mortgage loan for an existing home in the U.S. ticked down 5 percent on a seasonally adjusted basis at the end of June and was down 22 percent on a year-over-year basis, according to application data from the Mortgage Bankers Association.
At the same time, the average loan size ticked down to a six-month low, with the national home price index having turned negative for the first time in over a decade; the spread between jumbo and conforming loans, which inverted in May, having widen to 11 basis points; and the odds of another rate hike having jumped, none of which should catch any plugged-in readers, other than the most obstinate, by surprise.
“I didn’t fully anticipate how much the move in interest rates would convince people not to put their houses on the market.”
— Thomas I. Barkin, President and CEO of the Federal Reserve Bank of Richmond, as quoted in the WSJ by Nick Timiraos and Tom Fairless last week.