National Australia Bank has revealed a huge plunge in the number of home loan applications at the same time as the RBA rules out saving the property market. In an update to the market, NAB said the number of mortgage applications had slumped 15 per cent in just the last quarter, as a combination of higher rates, property tax changes and fuel price prices hit investors’ confidence.It comes as part of the banking giant’s disclosure into its business and private banking sector.NAB will announce its full quarterly update on August 17. While lending remains a concern for the RBA, its chief economist Sarah Hunter bluntly ruled out changing any policy to help the market out. “We don’t mechanically respond to falling house prices, but the housing market is really important,” she said at the Barrenjoey Annual Australia Economics Forum.“It is clearly very emotive as well. Everyone needs to live somewhere …. but no, we don’t just mechanically respond to what happens in the housing market.“We think about its impact on the economy and think about it from a monetary policy lens.”Last month’s hold rate followed three interest rate hikes in a row to start 2026, with the cash rate rising by 75 basis points.This reversed the three interest rate cuts of 2025.Ms Hunter conceded movement in house prices could have an impact on the broader economy and the RBA’s dual mandate.The central bank has two jobs: price stability through inflation being between 2 to 3 per cent and full employment. On Wednesday, headline inflation came in at 3.8 per cent, while the all-important trimmed mean – which strips out the top and bottom 15 per cent – was 3.6 per cent for the 12 months until June 30. “What we are paying attention to is the activity channel and what it therefore means for the labour market and inflation,” Ms Hunter said.“The other way I would talk about it, we are very concerned about financial stability and what (house price falls) will mean for housing stability.“At the moment there are absolutely no signs of systemic stress. We know for some people it is a bit tricky and that the rate hikes make it a bit harder to pay a mortgage.”Ms Hunter echoed a statement made by RBA governor Michele Bullock, who said house prices were falling faster than first thought. First-home buyers are “less likely to be affected” by Sydney’s housing price and unit downturn as historically affordable areas have increased.”We had expected conditions to ease in response to the changed outlook for monetary policy and the rise in the cash rate earlier this year,” Ms Bullock said. “But the housing market has eased by more than we had anticipated in May.”This appears to reflect a range of factors, including recent policy developments affecting the housing market and a general softening in housing market sentiment.”Even so, the easing in established housing prices has so far been modest following a period of strong growth.Ms Bullock said falling prices had so far been concentrated in Sydney and Melbourne, but prices were still at similar points to where they were before interest rates started to rise in February this year.”Furthermore, the most recent data suggest that, notwithstanding the price falls, negative equity remains very limited, affecting less than 1 per cent of borrowers,” she said. Ms Bullock also said despite higher interest rates, most households were still able to pay their mortgage. “Of that small group, our estimates suggest that only a small share of borrowers are facing severe difficulty with their loan repayments,” she said.“This is not to downplay that this would be stressful for those affected.“But it does indicate that financial stability risks are contained, and borrowers, in aggregate, have built up considerable savings buffers over recent years.”