Applications for mortgages for new home purchases increased 9% in July compared the June and were up 9.4% compared with July 2023, according to the Mortgage Bankers Association’s (MBA) Builder Application Survey (BAS).
The increase follows a month-over-month decrease of 16% in June.
“Purchase applications for newly built homes increased 9 percent in July helped by sustained demand for new homes and declining mortgage rates,” says Joel Kan, vice president and deputy chief economist for the MBA, in a statement. “The FHA share of applications was at 29 percent, the highest share in MBA’s survey dating back to 2013, as first-time buyers continue to account for a significant share of purchase activity, given the limited availability of starter homes around the country.”
“Our estimate of new home sales also showed an 8 percent increase over the month, which is a result of buyers having additional buying options in the housing market,” Kan adds.
The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 677,000, as of July. That’s an increase of 8.1% compared with June.
On an unadjusted basis, the MBA estimates that there were 57,000 new home sales in July, an increase of 9.6% compared with June.
By product type, conventional loans composed 60.1% of applications for mortgages for new home sales, while FHA loans composed 29.1%, RHS/USDA loans 0.4% and VA loans 10.4%.
The average loan size for new home in July was $393,344, down from $399,879 in June.
Photo: Alexander Andrews