June New Home Purchase Mortgage Applications Increase 26.1 Percent

The Mortgage Bankers Association Builder Application Survey data for June 2023 shows mortgage applications for new home purchases increased 26.1 percent compared from a year ago.

Compared to May 2023, applications decreased by 5 percent. This change does not include any adjustment for typical seasonal patterns.

“New home purchase activity continues to be a bright spot, as both new home applications and home sales were up on an annual basis,” said Joel Kan, MBA Vice President and Deputy Chief Economist. “With existing inventory still held back by homeowners, prospective buyers have turned to newly built homes instead. Rising mortgage rates in June likely caused some pullback in purchases over the month, as the 30-year fixed rate averaged close to 6.8 percent. However, applications for new home purchases have now shown annual increases for five consecutive months.”

MBA estimates 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 were running at a seasonally adjusted annual rate of 687,000 units in June 2023, based on data from the BAS. 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 seasonally adjusted estimate for June is an decrease of 9 percent from the May pace of 755,000 units.  On an unadjusted basis, MBA estimates that there were 60,000 new home sales in June 2023, an decrease of 6.3 percent from 64,000 new home sales in May.

By product type, conventional loans composed 65.5 percent of loan applications, FHA loans composed 24.1 percent, RHS/USDA loans composed 0.3 percent and VA loans composed 10 percent. The average loan size of new homes decreased from $403,581 in May to $400,281 in June.

MBA’s Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country.  Utilizing this data, as well as data from other sources, MBA is able to provide an early estimate of new home sales volumes at the national, state, and metro level. This data also provides 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 MBA’s Builder Application Survey.