June’s rebound in mortgage applications for home purchase was short-lived as total applications fell by 1.7% in July. This pushed applications back down toward 30-year lows and was probably prompted by mortgage rates peaking above 7% in the first week of the month. Although we think the Fed’s tightening cycle is likely finished, affordability remains incredibly stretched. As a result, without rate reversals anytime soon we think that mortgage applications will stay subdued for the remainder of the year.
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