Applications for mortgages for new home purchases plummeted 16% in June compared with May and were down 0.7% compared with June 2023, according to the Mortgage Bankers Association’s (MBA) Builder Application Survey.
“Applications for new home purchases slowed in June, consistent with broader declines in single-family construction and new building permits,” says Joel Kan, vice president and deputy chief economist for the MBA, in a statement. “The average loan size edged lower for the second consecutive month, and the share of FHA applications increased to 28.7 percent, as first-time buyers continue to account for a growing share of demand for newly built homes.
“MBA’s estimate of new home sales showed a monthly decline to a pace of 626,000 units – the slowest in four months,” Kan adds. “Mortgage rates dipped below 7 percent in June but that did little to spur purchase activity.”
MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 626,000 units in June – a decrease of 10.8% compared with May.
On an unadjusted basis, MBA estimates that there were 52,000 new home sales in June, a decrease of 17.5% compared with May.
By product type, conventional loans composed 60.8% of applications for new home purchases, while FHA loans composed 28.7%, VA loans composed 10.2% and RHS/USDA loans composed 0.3%.
The average loan size for a new home was $399,879 – down from $400,150 in May.
Photo: Todd Kent