Mortgage Rates Could Ruin Summer Home-Sales Hopes

NEW YORK (TheStreet) -- New figures on the U.S. residential real estate market show a slowdown nationwide, right in the heart of the summer selling season.

June and July are usually the busiest months of the year for real estate agents, as parents like to cement a home deal before the school year opens in September.

Right now, though, the market isn't as aggressive as real estate professionals would like. Data from the Mortgage Bankers Association show June mortgage applications down 5% from May, a reversal for the real estate market in most years.

Also see: Good Time to Be a Landlord, but Buy in the Right Places

It's true May was a standout month for homebuyers, with sales of existing homes up by 4.9%, according to Realtor.org. The next reading comes out July 22, and it could be difficult for the real estate market to match its high level of activity for May. In fact, if the MBA numbers are any indication, slow or no growth could be the case for the rest of the summer or even the year.

Not only were mortgage applications down by 5%, but the average loan size of new homes decreased from $296,427 in May to $296,078 in June.

The MBA's outlook for new-home sales sees no change overall, on an unadjusted basis, from May to June.

One theory why home sales are slowing: Mortgage rates are rising, albeit slowly, and that could be keeping buyers away from locking down a home this summer.

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