The average value of a home purchase mortgage application hit a record high $359,000 at the end of June. But that doesn’t mean house price growth is set to take-off. An increase in the share of new home sales, tighter credit conditions and perhaps increased demand for larger properties help explain the rise in mortgage size. But as house price indices are adjusted for changes in the quality of homes being sold, the rise in mortgage size doesn’t pose a large risk to our view that growth will slow to zero by early 2021.
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