Mortgage Applications for New Home Purchases Decline in June

On Thursday, the Mortgage Bankers Association (MBA) reported that data from its Builder Application Survey (BAS) reveal that mortgage applications for new home purchases decreased 16.0% month-over-month in June but were up 0.7% year-over-year. This change does not include any adjustments for typical seasonal patterns.

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% from May. On an unadjusted basis, MBA estimates there were 52,000 new home sales in June, a decrease of 17.5% from May.

By loan product type, conventional loans comprised 60.8% of loan applications; FHA loans comprised 28.7%; RHS/USDA loans comprised 0.3%; and VA loans comprised 10.2%. The average loan size for a new home decreased from $400,150 in May to $399,879 in June.

Commenting on the results of the June BAS, MBA Vice President and Deputy Chief Economist Joel Kan said:

“Applications for new home purchases slowed in June, consistent with broader declines in single-family construction and new building permits as well as typical seasonal patterns. The average loan size edged lower for the second consecutive month, and the share of FHA applications increased to 28.7%, 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. Mortgage rates dipped below 7% in June, but that did little to spur purchase activity.”