New-Home Purchase Applications Up 50 Percent Year Over Year

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Data from the Mortgage Bankers Association’s (MBA) Builder Application Survey for June shows that mortgage applications for new home purchases increased 54.1 percent compared to a year ago. Compared to May, applications increased by 20 percent.

“Home-buying activity that was delayed by the pandemic in March and April is just being realized later in the season,” says the MBA’s Joel Kan. “The fact that applications are up over 50 percent from last June further reinforces that point.”

New-home sales in June increased 15%, to 774,000 units, which represents the strongest level of activity since January. The MBA expects new home construction activity to speed up to better meet demand; the sustainability of the upward trend in home purchase activity will hinge on supply ramping up rapidly.

By product type, conventional loans composed 65.1 percent of loan applications, FHA loans composed 22.6 percent, RHS/USDA loans composed 1.0 percent and VA loans composed 11.2 percent.

The average loan size of new homes increased from $332,793 in May to $338,589 in June.

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