Applications for mortgages for new home purchases fell 8.8% in June compared with May and were down 12% compared with May 2018, according to the Mortgage Bankers Association’s (MBA) Builder Applications Survey (BAS).
The decrease is in keeping with seasonal patterns but it is also partly attributable to lack of supply.
“So far this year, new home applications are up 2.5 percent relative to the first six months of 2017,” says Mike Fratantoni, chief economist and senior vice president of research and industry technology for the MBA, in a statement. “Our sense is that builders remain constrained by the tight job market for construction labor and rising input costs, particularly lumber costs.”
In May, applications for mortgages for new home purchases fell 4% compared with April.
As of the end of June, new single-family home sales were running at a seasonally-adjusted annual rate of 587,000 units, a decrease of 6.2% from the May pace of 626,000 units, according to the MBA’s data.
On an unadjusted basis, the MBA estimates that there were 53,000 new home sales in June, a decrease of 11.7% from about 60,000 new home sales in May. By product type, conventional loans composed 71.3% of loan applications for new home purchases, while FHA loans composed 15.9%, RHS/USDA loans composed 1.1% and VA loans composed 11.6%.
The average loan size for a new home in June was $333,033, down from $337,515 in May.