Takeaways:
- Mortgage applications for newly built homes are decreasing; new-home applications fell by 4 percent month over month.
- On an unadjusted basis, MBA estimated there were 44,000 new-home sales in July, a decrease of 2.2 percent from June’s 45,000 sales.
- New single-family home sales ran at a seasonally adjusted annual rate of 534,000 units last month, an increase of 7.7 percent from June’s pace of 496,000 units.
As mortgage applications for existing homes are flattening out, applications for newly built homes are decreasing, the Mortgage Bankers Association (MBA) reported this week.
New-home applications fell by 4 percent from June to July and are in line with the overall slowdown we’re seeing in the purchase mortgage market, the association said as it released its monthly Builder Application Survey.
On an unadjusted basis, MBA estimated there were 44,000 new-home sales in July, a decrease of 2.2 percent from June’s 45,000 sales.
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Lynn Fisher, MBA’s vice president of research and economics, attributed this trend to an increase in interest rates since the beginning of the spring season. However, Fisher also noted that “nonetheless, the number of builder applications was still up 15 percent compared to a year ago.”
New single-family homes ran at a seasonally adjusted annual sales rate of 534,000 units last month, an increase of 7.7 percent from June’s pace of 496,000 units.
By product type, conventional loans comprised 63.4 percent of loan applications, FHA loans 18.8 percent, RHS/USDA loans 4.9 percent and VA loans 12.9 percent. The average loan size of new homes decreased from $321,678 in June to $316,995 in July, MBA said.
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MBA’s Builder Application Survey tracks application volume from mortgage subsidiaries of homebuilders across the country. Official new-home sales estimates are conducted by the Census Bureau on a monthly basis.
