Applications For New Home Sales Eked Out an Increase

After decreasing the previous two months, applications for mortgages for new home purchases increased 0.2% in July compared to June and were up 3.6% compared with July 2017, according to the Mortgage Bankers Association’s (MBA) Builder Applications Survey (BAS).

As of the end of July, sales of new single-family homes were at a seasonally-adjusted annual rate of 637,000 units, according to the MBA’s data.

Joel Kan, associate vice president of economic and industry forecasting for the MBA, says the uptick in applications for new homes in July was likely a result of the fact that builders brought more inventory online in May.

“This was likely supported by the May surge in housing starts and is a reflection of the strength of demand due to the healthy economy,” Kan says in a statement. “Because inventory of existing homes remains quite tight, this increase in new home supply will be welcomed by the market.”

The MBA estimates that there were 53,000 new home sales in July, unchanged from June.

It estimates that new home sales will reach an annual pace of about 587,000 units in July, also unchanged from June.

By product type, conventional loans composed 72.1% of applications for new home sales in July, while FHA loans composed 15.3%, RHS/USDA loans 1.1%, and VA loans 11.4%.

The average loan size for a new single-family in July was $337,775, up from $333,033 in June.

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