Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for July 2021 show mortgage applications for new home purchases decreased 27.4% compared from a year ago. Compared to June 2021, applications decreased by 4%. This change does not include any adjustment for typical seasonal patterns.
“Mortgage applications for new home purchases declined in July – as is typical most summers when home sales start to moderate – but did come in at the second-strongest July reading since the inception of MBA’s survey in 2012,” says Joel Kan, MBA’s associate vice president of economic and industry forecasting.
“Furthermore, the average loan size again increased to a new record of $402,440,” he adds. “Homebuilders are still facing elevated building costs and accelerating home-price growth from the continued imbalance between supply and demand. After adjusting for seasonal patterns, our estimate of annualized new home sales showed a jump of more than 10% from June. The housing market is still extremely competitive, and prospective buyers have increasingly turned to newly built homes because for-sale inventories remain so low.”
MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 779,000 units in July 2021, 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 July is an increase of 10.7% from the June pace of 704,000 units. On an unadjusted basis, MBA estimates that there were 64,000 new home sales in July 2021, a decrease of 3% from 66,000 new home sales in June.
By product type, conventional loans composed 73.8% of loan applications, FHA loans composed 14.6%, RHS/USDA loans composed 0.8% and VA loans composed 10.8%. The average loan size of new homes increased from $392,370 in June to $402,440 in July.
Read the full survey here.