Despite a slight decrease in rates that came during the month, applications for mortgages for new home purchases were flat in August compared with July but were up 4.4% compared with August 2023, according the Mortgage Bankers Association’s (MBA) Builder Application Survey (BAS).
“Applications for new home purchases continue to show year-over-year growth, increasing by more than four percent and extending the annual growth streak to 19 consecutive months,” says Joel Kan, vice president and deputy chief economist for the MBA, in a statement. “Homebuyers, including a growing share of first-time buyers, continue to favor newly built homes, as declining mortgage rates in August contributed to the uptick in new home sales activity. The FHA share of purchase applications reached another record high in the survey at 29.6 percent. Estimated new home sales increased almost 15 percent over the month, reaching the fastest sales pace since February 2022.”
The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 776,000 units in August – an increase of 14.6% compared with July.
On an unadjusted basis, the MBA estimates that there were 60,000 new home sales in August, an increase of 5.3% compared with the previous month.
By product type, conventional loans represented 59.7% of loan applications, FHA loans represented 29.6%, VA loans represented 10.2% and RHS/USDA loans represented 0.%
The average loan size for a new home increased to $395,935 in August, up from $393,344 in July.
MBA’s Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country. Utilizing this data, as well as data from other sources, MBA is able to provide an early estimate of new home sales volumes at the national, state, and metro level.
This data also provides information regarding the types of loans used by new home buyers.
Official new home sales estimates are conducted by the Census Bureau on a monthly basis. In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.
Photo: Alexander Andrews