Mortgage Applications for New-Home Purchases Unchanged in August

On Tuesday, the Mortgage Bankers Association (MBA) reported that data from its August Builder Application Survey reveals that mortgage applications for new-home purchases were unchanged month-over-month but were up 4.4% year-over-year. This change does not include any adjustments for typical seasonal patterns.

New single-family home sales were running at a seasonally adjusted annual rate (SAAR) of 776,000 units in August, an increase of 14.6% from the July pace of 677,000 units. On an unadjusted basis, MBA estimates that there were 60,000 new home sales in August, an increase of 5.3% from 57,000 new home sales in July.

By loan product type, conventional loans comprised 59.7% of loan applications in August; FHA loans comprised 29.6%; RHS/USDA loans comprised 0.5%; and VA loans comprised 10.2%. The average loan size for a new home increased from $393,344 in July to $395,935 in August.

In remarks accompanying the report, MBA Vice President and Deputy Chief Economist Joel Kan said:

“Applications for new home purchases continue to show year-over-year growth, increasing by more than 4% and extending the annual growth streak to 19 consecutive months. Homebuyers, including a growing share of first-time buyers, continue to favor newly built homes, as declining mortgage rates in August contributed to the uptick in new home sales activity. The FHA share of purchase applications reached another record high in the survey at 29.6%. Estimated new home sales increased almost 15% over the month, reaching the fastest sales pace since February 2022.”