Applications for mortgages for new home purchases decreased 6% in August compared with July but were up 1% compared with August 2024, according to the Mortgage Bankers Association’s (MBA) Builder Application Survey (BAS).
“Applications to purchase newly constructed homes remained higher than last year, although the monthly pace of applications slowed from July,” says Joel Kan, vice president and deputy chief economist for the MBA, in a statement. “The bright spot in the August results was that estimated new home sales increased for the third consecutive month to its strongest sales pace in almost a year. Housing inventory levels continue to grow, which has given prospective homebuyers more buying options and continues to reduce sales price pressures. The average loan size remained below $380,000 for the fifth consecutive month and was close to 2021 levels.”
Sales of new, single-family homes were running at a seasonally adjusted annual rate of 730,000 in August. That’s an increase of 6.6% from the July pace of 685,000 units.
On an unadjusted basis, the MBA estimates that there were 56,000 new home sales in August, a decrease of 3.4% from 58,000 in July.
By product type, conventional loans composed 49.9% of applications for new home sales, FHA loans composed 35.6%, RHS/USDA loans composed 1.2% and VA loans composed 13.4%.
The average loan size for new home increased to $374,288, up from $372,745 in July.
Photo: Amanda Smith