Mortgage demand declines in US and Australia amid affordability concerns

Mortgage demand is facing significant downward pressure in both the United States and Australia due to high property prices and rising interest rates.

In the United States, new home mortgage applications fell for the fifth consecutive month in August. According to the Mortgage Bankers Association, applications for newly constructed homes dropped 5.5% from August 2025 and 6% from July, reaching their lowest level of 2026. While conventional mortgages accounted for 49.5% of applications, FHA loans saw an increased share at 35% as buyers seek more accessible financing options.

In Australia, first-home buyer demand experienced its steepest annual decline in four years, falling 20.1% year-on-year in August. Data from Equifax indicates that overall mortgage demand also dropped 14.1% compared to the previous year. Experts note that while government deposit schemes exist, they have not sufficiently addressed the core issue of housing affordability, as average prices for first-home buyers remain high.