Early signs of slowdown in house price appreciation

Mortgage applications for home purchase are showing the strain from higher mortgage interest rates, falling by 5.6% m/m in July. It’s too early to see the effect of higher rates on the existing home sales numbers, but the new home sales figures are measured earlier in the home-buying process and they rose by 8.3% m/m in June. So far then, the evidence that higher rates are hitting housing market activity has been mixed. Slower house price growth, meanwhile, has less to do with rising rates so much as the increase in the supply of homes for sale. CoreLogic prices rose by 0.6% m/m in June, the slowest pace in six months. We think that price growth will continue to moderate from here.