The Mortgage Bankers Association (MBA) is reporting that data from their July 2021 Builder Application Survey (BAS) shows that mortgage applications for new home purchases decreased -27.4% year-over-year and were down -4.0% when compared to June 2021. This change does not include any adjustment for typical seasonal patterns. Based on data from the BAS, MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 779,000 units in July 2021. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors. The seasonally adjusted estimate for July is an increase of 10.7% from the June pace of 704,000 units. On an unadjusted basis, MBA estimates that there were 64,000 new home sales in July 2021, a decrease of -3.0% from the 66,000 new home sales in June.
In remarks prepared for the release of the BAS, Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting said, “Mortgage applications for new home purchases declined in July — as is typical most summers when home sales start to moderate — but did come in at the second-strongest July reading since the inception of MBA’s survey in 2012. Furthermore, the average loan size again increased to a new record of $402,440. Homebuilders are still facing elevated building costs and accelerating home-price growth from the continued imbalance between supply and demand.”
Kan went onto say that “After adjusting for seasonal patterns, our estimate of annualized new home sales showed a jump of more than 10 percent from June. The housing market is still extremely competitive, and prospective buyers have increasingly turned to newly built homes because for-sale inventories remain so low.”
FEA compiles the Wood Markets News from various 3rd party sources to provide readers with the latest news impacting forest product markets. Opinions or views expressed in these articles do not necessarily represent those of FEA.
July New Home Purchase Mortgage Applications Decreased 27.4 Percent