MBA: July New Home Purchase Applications Up 11% from June; Up 31% from Year Ago
The Mortgage Bankers Association’s Builder Applications Survey data for July show mortgage applications for new home purchases increased by 11 percent from June and by 31.2 percent from a year ago.
“July’s strong new home sales increase on a monthly and annual basis was driven by the ongoing decline in mortgage rates, combined with steady housing demand and a still-healthy job market,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “The average loan size decreased last month, likely influenced by the increase in the first-time homebuyer share, as these buyers are likely to choose lower-priced, entry-level homes.”
By product type, conventional loans composed 69.1 percent of loan applications, FHA loans composed 18.1 percent, RHS/USDA loans composed 1.0 percent and VA loans composed 11.7 percent. The average loan size of new homes decreased from $329,593 in June to $325,457 in July.
MBA estimated new single-family home sales were at a seasonally adjusted annual rate of 754,000 units in July, based on data from the BAS, an increase of 16.7 percent from the June pace of 646,000 units. On an unadjusted basis, MBA estimated 63,000 new home sales in July, an increase of 8.6 percent from 58,000 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 Applications 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/research-and-economics/single-family-research/builder-applications-survey.
