Applications for new home purchases increased 1% on an unadjusted basis in June compared to May, according to the Mortgage Bankers Association (MBA) Builder Application Survey.
‘As house prices continue to recover, mortgage applications for the purchase of newly constructed homes increased slightly in June,’ says Lynn Fisher, vice president of research and economics for the MBA, in a release. ‘Application activity in June was slightly higher compared to the past two years, leading us to estimate that new homes sales increased eight percent from May on a seasonally adjusted annual basis.’
By product type, conventional loans composed 67.2% of loan applications, Federal Housing Administration loans composed 19.6%, Rural Housing Service/U.S. Department of Agriculture loans composed 1.0% and Veterans Affairs loans composed 12.2%. The average loan size of new homes increased from $320,744 in May to $321,678 in June.
New single-family home sales were running at a seasonally adjusted annual rate of about 496,000 units in June, an increase of 8.1% from the May pace of 459,000 units, the MBA estimates. On an unadjusted basis, there were about 45,000 new home sales in June, unchanged from May.
In related news, builder confidence in the market for newly built, single-family homes in July hit an index score of 60 on the National Association of Home Builders(NAHB)/Wells Fargo Housing Market Index (HMI).
The last time the HMI reached an index score of 60 was in November 2005, NAHB reports.
‘The fact that builder confidence has returned to levels not seen since 2005 shows that housing continues to improve at a steady pace,’ says Tom Woods, chairman of NAHB, in a statement. ‘As we head into the second half of 2015, we should expect a continued recovery of the housing market.’
‘This month's reading is in line with recent data showing stronger sales in both the new and existing-home markets, as well as continued job growth,’ adds David Crowe, chief economist for NAHB. ‘However, builders still face a number of challenges, including shortages of lots and labor.’