Mortgage applications for new home purchases increased 26.1 percent year-over-year in June, according to the Mortgage Bankers Association (MBA) Builder Application Survey (BAS). Applications fell 5 percent from May.
“New home purchase activity continues to be a bright spot, as both new home applications and home sales were up on an annual basis,” Joel Kan, MBA vice president and deputy chief economist, said in a release. “With existing inventory still held back by homeowners, prospective buyers have turned to newly built homes instead. Rising mortgage rates in June likely caused some pullback in purchases over the month, as the 30-year fixed rate averaged close to 6.8 percent. However, applications for new home purchases have now shown annual increases for five consecutive months.”
MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 687,000 units in June, based on data from BAS. The seasonally adjusted estimate is a decrease of 9 percent from the May pace of 755,000 units. On an unadjusted basis, MBA estimates there were 60,000 new home sales in June, down 6.3 percent from 64,000 in May.
Conventional loans made up 65.5 percent of loan applications, FHA loans 24.1 percent, RHS/USDA loans 0.3 percent, and VA loans composed 10 percent. The average loan size of new homes fell from $403,581 in May to $400,281 in June, according to MBA.