Mortgage loan application volume in the U.S. dropped another 3.0 percent over the past week from what was already a 22-year low, with a 2 percent drop in purchase mortgage activity, which is now down over 20 percent on a year-over-year basis.

At the same time, the average purchase loan size, with which the median sale price is correlated, is dropping, in part due to a pronounced “weakening” of activity at the high end of the market, a weakening which hit the low end of the market months ago. In other words, the change in the mix of sales which has been distorting median sale price trends, which are frequently conflated with “appreciation,” is starting to normalize.

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