With a seasonal adjustment for Labor Day, mortgage loan application volume in the U.S. ticked down 1.2 percent over the past week, according to data from the Mortgage Bankers Association’s. And while purchase mortgage activity was effectively unchanged from the week prior on an adjusted basis, it dropped 12 percent in the absolute and was down 29 percent on a year-over-year basis despite rising inventory levels and a rapid deceleration in values.

As we noted last month, the average purchase loan size has been dropping as well, 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 and had been distorting median sale price trend, a trend which is frequently conflated with “appreciation” and has started to reverse and become even more evident.

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