Mortgage Applications Falling, Consumer Credit Balances Rising

The housing market may be falling into a recession, but consumers continue to spend—though they have needed to borrow more to do so. The seasonally adjusted purchase Index for mortgage applications, compiled by the Mortgage Bankers Association, decreased 7% w/w and 21% y/y during the week ended June 3. Record-high home prices combined with this year’s spike in the mortgage rate to 5.40% have clobbered housing affordability.