MBA: July Applications for New Home Purchases Down 8%

Mortgage Bankers Association Builder Application Survey data for July show mortgage applications for new home purchases fell by 8 percent from June but increased by 2.4 percent from a year ago.   

The month over month change does not include any adjustment for typical seasonal patterns.  

“Month over month declines in applications are part of the normal seasonal pattern this time of year,” said MBA Vice President of Research and Economics Lynn Fisher. “Mortgage applications to home builders in July increased at the slowest year over year pace to date in 2016 at just 2.4 percent over a year ago.”  

By product type, conventional loans composed 68.5 percent of loan applications; FHA loans, 17.2 percent; RHS/USDA loans, 0.7 percent; and VA loans, 13.6 percent. The average loan size of new homes decreased from $326,175 in June to $325,843 in July.  

MBA estimated new single-family home sales at a seasonally adjusted annual rate of 540,000 units in July, an increase of 1.9 percent from the June pace (530,000). On an unadjusted basis, MBA estimated 45,000 new home sales in July, a decrease of 4.3 percent from 47,000 new home sales in June.   

The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.   

The MBA Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country. Using these data, as well as data from other sources, MBA provides an early estimate of new home sales volumes at the national, state and metro level. These data also provide information regarding types of loans used by new home buyers. Official new home sales estimates are conducted by the Census Bureau on a monthly basis. In those data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.  

For additional information on MBA’s Builder Applications Survey, click https://www.mba.org/news-research-and-resources/forecasts-data-and-reports/single-family-research/servicing-operations-study-and-forum-for-prime-and-specialty-servicers-x75411.