Mortgage Applications for New Home Purchases Climb Month-Over-Month and Year-Over-Year in July

The Mortgage Bankers Association (MBA) reported on Tuesday (8-15-23) that data from its July Builder Application Survey (BAS) reveal mortgage applications for new home purchases increased 0.2% month-over-month and were up 35.5% year-over-year. These changes do not include any adjustments for typical seasonal patterns.

According to the MBA, the seasonally adjusted estimate for July decreased 1.5% from June’s pace of 687,000 units. On an unadjusted basis, the MBA estimates that there were 56,000 new home sales in July, a decrease of 6.7% from 60,000 new home sales reported in June.

Adding additional background and his analysis to the report, MBA Vice President and Deputy Chief Economist Joel Kan said:

“Applications for purchase loans on newly constructed homes remained strong in July, up 36% annually, as new homes continued to account for a growing share of homes available for sale.

The FHA share of purchase applications was 24.2%, the highest share since May 2020, and has increased in four of the last five months. FHA purchase loans are a popular option for many first-time homebuyers and this increasing trend in the FHA share is indicative of more first-time buyers looking to new homes as an option, given the lack of for-sale inventory among existing homes and challenging affordability conditions.”