MBA: July New Home Purchase Mortgage Applications Up 5.1% Year-over-Year

Mortgage applications for new home purchases increased 5.1 percent between July 2016 and last month, the Mortgage Bankers Association reported this morning.

Compared to June 2017, applications decreased by 12 percent, the MBA Builder Applications Survey said. This change does not include any adjustment for typical seasonal patterns.

“The year-over-year increase in applications to homebuilders for new home purchase mortgages slowed down somewhat in July after relatively strong showings in May and June,” said MBA Vice President of Research and Economics Lynn Fisher. “Nonetheless, the pattern of applications over the last three months suggests that housing starts will fall off less than expected during late summer and early fall as demand spills over from the low-inventory existing home market into the market for new homes.”

Fisher noted that year to date through July, applications for new homes remain up by more than 7 percent compared to the same period last year.

By product type, conventional loans composed 69.8 percent of loan applications, FHA loans composed 15.7 percent, RHS/USDA loans composed 1.1 percent and VA loans composed 13.3 percent. The average loan size of new homes increased from $327,833 in June to $329,483 in July.

The Mortgage Bankers Association estimated new single-family home sales were running at a seasonally adjusted annual rate of 562,000 units in July. The new home sales estimate is derived using mortgage application information from the Builder Applications Survey as well as assumptions regarding market coverage and other factors.

The seasonally adjusted estimate for July represented a 10.5 percent decrease from June’s 628,000-unit pace. On an unadjusted basis, MBA estimated there were 49,000 new home sales in July, a 10.9 percent decrease from 55,000 new home sales in June.

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

Click here for additional information on the MBA Builder Applications Survey