Applications for mortgages for new home purchases fell 5% in June compared with May but were up 26.1% compared with June 2022, according to the Mortgage Bankers Association’s (MBA) Builder Application Survey (BAS).
“New home purchase activity continues to be a bright spot, as both new home applications and home sales were up on an annual basis,” says Joel Kan, vice president and deputy chief economist for the MBA, in a statement. “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.”
As of the end of June, new single-family home sales were running at a seasonally adjusted annual rate of 687,000 units. That’s a decrease of 9% compared with May.
On an unadjusted basis, the MBA estimates that there were 60,000 new home sales in June, a decrease of 6.3% compared with May.
By product type, conventional loans composed 65.5% of loan applications for new home sales in June while FHA loans composed 24.1%.
RHS/USDA loans composed 0.3% and VA loans composed 10%.
The average loan size of new home loan decreased from $403,581 in May to $400,281 in June.
Photo: Alexander Andrews