Purchasing power

Decline was largely driven by a large dip in cash-out refinance locks.

Average incomes for this age group increased by 24% since 2012, but housing prices jumped 86%.

Consumer sentiment about purchasing a home nears its record high as almost half of those surveyed said mortgage rates will stay at the current low levels, according to Fannie Mae.

Loan limits for most mortgages Fannie Mae and Freddie Mac buy will exceed $500,000 for the first time ever next year, and the maximum for most high-cost areas will be $765,000.

The sustained rise in home values will boost Fannie Mae and Freddie Mac's loan limits for 2019, marking the second consecutive year in which it increased by nearly 7%.

Conforming loan limits for mortgages bought by Fannie Mae and Freddie Mac will increase for the second consecutive year in response to the rapid rise in home prices, the Federal Housing Finance Agency said.