MBA Chart of the Week: Yearly Changes in Purchase Applications
Source: MBA State Mortgage Activity Report (https://www.mba.org/news-research-and-resources/research-and-economics/single-family-research/weekly-applications-survey/state-level-application-data).
This week’s chart shows data from the MBA State Mortgage Activity Report that captures the year over year change in the number of home purchase applications for the U.S. and three large states.
As housing inventory remains tight, and mortgage rates and home prices continue to rise, we are seeing affordability challenges beginning to surface and hold down home buying activity, as can be seen by the slowing rate of purchase growth for the U.S. and particularly for high-cost areas in California and Florida.
While the U.S. and Texas saw purchase activity increase by 2 percent and 8 percent, respectively, in June, California and Florida saw decreases of 4 percent and 2 percent, respectively. California had seen year over year growth of up to 10 percent in the second half of 2017, but has now showed decreases in four of the past six months. Florida saw growth mostly through the first half of 2017 (not shown in the chart) but since the large September 2017 drop (due to the hurricanes), has seen mostly year over year declines in purchase applications. Texas continues to see year over year increases, but the pace of growth has eased over the past two months.
Additionally, according to data from the National Association of Realtors, California, Florida and Texas are the top three states with the highest share of foreign buyers of homes. As the level of activity from foreign buyers has decreased lately due to accelerating U.S. home prices, a strong dollar, and other factors, those states are likely being affected by that as well.
(Joel Kan associate vice president of economic and industry forecasting with MBA; he can be reached at jkan@mortgagebankers.org. Anh Doan is senior financial analyst with MBA. She can be reached at adoan@mortgagebankers.org.)
