Purchase applications decreased as ongoing affordability challenges persist with rates at their current levels and with home-price appreciation still strong in many markets, said Joel Kan, an MBA economist.
Homebuyers are likely waiting for interest rates to drop further, with the expectation of a rate cut by the Federal Reserve in September and the hope for mortgage rates to decrease significantly.
Affordability remains stretched; analyst Ivy Zelman suggests that a drop of 100 basis points in mortgage rates, to a 'five handle', could stimulate more momentum in the market.
Applications to refinance a home loan slightly increased, showing a 38% higher demand than the same week one year ago, albeit coming from a historically low level.
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