Mortgage loan application volumes to either purchase or refinance a home in the U.S. ticked down 2.8 percent on a seasonally adjusted basis over the past week and were down 4 percent in the absolute, with a 5 percent drop in refinancing activity and a 2 percent drop in applications to purchase a home, according to the Mortgage Bankers Association.
On a year-over-year basis, refinancing activity was down 31 percent and purchase activity was down 6 percent with a 15.2 percent drop in application volumes to purchase a new home last month.
Since covid started, the median home [sales] price has gone from about 320k to 404k. Insane 25% spike. Now talk of bumping conventional loan limits to $1mm.
Maybe we have a pause in qualified buyers with prices up this much. But maybe lenders will keep stoking the fire. Rather than seeing 2015 era SF real estate dynamics (insatiable demand) as a problem we have exported the situation nationally through fiscal and monetary policy.
Driven by a dramatic change in the mix of what has sold and having started to slip as activity in the lower-end of the market, which was frozen, has started to resume.
I don’t entirely understand the graphic about mix of home sales in your previous post. If between two points in time all houses are appreciating, well then of course the number of lower priced houses selling is going down (all house prices are going up!).
Demonstrate that LARGER houses are selling or NEWER houses are selling between two points in time, and then you have a change in mix, but to suggest “more expensive” houses are selling while the market is going up is both self-evident and circular reasoning.
I thought you didn’t trust the Realtor’s association anyway. Why use their charts?
You’d expect a different distribution if it were simply a case of all prices going up, with a drop in the lowest tier, a rise in the highest tier and little change in the middle tiers as volumes move up the ladder. On top of which, you’re starting to see the return of lower priced inventory to the market.
But what you describe is exactly what the third chart in your previous post shows. It was not a change in mix, it was a broad increase in prices.
I don’t think a change in the mix of sold homes is evident in the data.
You might want to take another look, because that’s not exactly what that chart shows. And once again, the median sale price has actually started to slip with a return of lower priced inventory and (share of the) sales.
Cool. If you can look at the chart from the St. Louis Fed with the national housing price spike during Covid and come away thinking that the mix of sold homes from Alaska to West Virgina changed to cause the increase, then we will have to agree to disagree. The median sale price is now $404K, far higher than the prices quoted by the NAR in your link.
First of all, you don’t seem to realize that the Fed data you’re referencing is for New Single-Family Homes Sales, not existing/all homes.
Second, new home sales have, in fact, been impacted by a change in mix as well, not only in terms of tiers but also location.
And third, even if the chart you’re misquoting was for all sales, which it’s not, it would be a “not enough information for a meaningful answer” scenario (with respect to understanding the impact of mix), which is exactly why the segmentation of sales is both important and meaningful.
In related news: Purchase Activity for New Homes in the U.S. Slips