Kirk Tatom, the president of Dallas-based Tatom Lending, agreed, citing construction costs as a factor. He said: “With new homes you have a two-headed monster, with the rising cost of lumber and supplies, such as copper, electrical wiring and chips being more expensive.”

Sales of existing homes bucked the downward trend slightly during the same period, with a seasonally adjusted annual rate of 5.86 million units sold, representing a 1.4% increase after four straight months of decline, according to the National Association of Realtors.

Read more: Brokers untroubled by mortgage application drop

Tatom, however, said that he had also noted “a pullback in applications” on existing homes. He said: “We’re starting to see buyers getting frustrated and walking away. Some of our clients have put in 18 to 20 offers and can’t get it accepted.”

Tatom said potential buyers were being crowded out despite a rise in wages as the increase in house prices was higher.