'The bigger picture' shows payments are still high

The median loan amount on new applications fell to $320,512 in June, from $325,000 in May, a sign that home-price growth is moderating as well, according to MBA data provided to CNBC. A slight decrease in mortgage rates in the month of June definitely helped buyers, said Yun. The 30-year fixed rate mortgage declined to 6.78% on July 25, down from 7.22% on May 2, according to Freddie Mac data via the Fed.

But it's a "very small improvement" in context, he said — the typical monthly mortgage payment has essentially doubled from pre-Covid years. Before Covid, a $1,000 mortgage payment was the norm; today it's above $2,000, he said. "In the bigger picture, it is a substantial increase on pre-Covid conditions, yet on a month-to-month basis, it is a slight improvement," Yun said.

More sellers, less competition for buyers

Investors think the Federal Reserve could cut interest rates about three times in the latter half of the year, which would "further improve housing affordability," Yun added, While the housing market isn't yet a buyer's market, more supply and declining rates indeed create favorable conditions for buyers, according to experts.

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