MBA Builder Applications Survey Falls for 4th Straight Month

The Mortgage Bankers Association Builder Applications Survey reported mortgage applications for new home purchases in July fell by 16.1 percent from a year ago, marking the fourth consecutive monthly decrease.

Due to a revision in the prior month’s submission from a participant, MBA restated June results. From June, applications decreased by 7 percent. This change does not include any adjustment for typical seasonal patterns.

By product type, conventional loans comprised 70.7 percent of loan applications, FHA loans represented 17.7 percent, RHS/USDA loans represented 0.2 percent and VA loans represented 11.4 percent. The average loan size of new homes decreased from $423,221 in June to $416,029 in July.

“Mortgage applications to purchase newly built homes weakened in July, as prospective homebuyers continue to delay decisions because of economic uncertainty and still-high home prices and mortgage rates,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “The slide in purchase applications for new homes – now down for the fourth consecutive month and 16 percent lower than a year ago – is consistent with data on declining homebuilder sentiment and slowing permitting activity for new construction.”

MBA’s estimate of new single-family home sales, which has consistently been a leading indicator of the U.S. Census Bureau’s New Residential Sales report, is that new single-family home sales ran at a seasonally adjusted annual rate of 591,000 units in July, based on data from the BAS— a decrease of 2.6 percent from the revised June pace of 607,000 units to the slowest pace since April 2020. On an unadjusted basis, MBA estimated 50,000 new home sales in July, a decrease of 10.7 percent from the revised 56,000 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 the MBA Builder Applications Survey, click here.