US New-Home Purchase Mortgage Applications Decline in June

On Thursday, the Mortgage Bankers Association (MBA) reported that its Builder Application Survey (BAS) reveals mortgage applications for new-home purchases declined by 4.0% in June. This does not include any adjustment for typical seasonal patterns. Year-over-year, mortgage applications increased 8.5%.

MBA estimates new single-family home sales were running at a seasonally adjusted annual rate (SAAR) of 667,000 units in June, an increase of 5.7% from the May pace of 631,000 units. On an unadjusted basis, MBA estimates there were 55,000 new-home sales, a decrease of 5.2% from 58,000 in May.

By product type, conventional loans composed 50.0% of loan applications; FHA loans composed 35.1%; RHS/USDA loans composed 1.2%; and VA loans composed 13.8%. The average loan size for new homes decreased from $379,209 in May to $376,077 in June.

Commenting on the report, MBA Vice President and Deputy Chief Economist Joel Kan said:

“Applications to purchase new homes fell in June, consistent with typical seasonal patterns, but remained ahead of last year’s pace. A cloudier economic outlook and elevated mortgage rates continues to weigh on potential buyers, while growing inventory, builder incentives, and lower prices have brought some buyers back to the market. As a result, we continue to see home sales ebb and flow. MBA’s estimate of new home sales increased to a sales pace of 667,000 units, up on a monthly and annual basis.”