The number of mortgage applications dropped by nearly 24% in June compared to the year before as potential homebuyers have been scared away from purchases due to long delays in building, and high prices for homes. CNBC‘s Diana Olick reports:
“The single family market in particular desperately needs more new homes, especially on the lower end where first-time home buyers need some price relief and more supply choices, but we also know that it is getting more and more difficult to deliver from a builder perspective at the wanted price points,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group.
Elsewhere in the market, mortgage applications to purchase a newly built home dropped nearly 24% in June year over year, according to the Mortgage Bankers Association. That was the third consecutive month of decline.
“Homebuilders are encountering stronger headwinds of late, as severe price increases for key building materials, rising regulatory costs, and labor shortages impact their ability to raise production. This has dampened new home sales and quickened home-price growth,” said Joel Kan, an MBA economist.
Action Line: Markets are cyclical. There’s nothing wrong with waiting a little longer to purchase. In the meantime, if you’re serious about keeping an eye on the cycle, click here to sign up for my monthly Survive & Thrive newsletter. But only if you’re serious.
