US New-Home Purchase Mortgage Applications Decrease in July

On Thursday, the Mortgage Bankers Association (MBA) reported that mortgage applications for new-home purchases fell 1.0% in July from June, according to data from its Builder Application Survey. Applications were down 5.7% year-over-year. Changes are not seasonally adjusted.

MBA estimates new single-family home sales were running at a seasonally adjusted annual rate (SAAR) of 647,000 units in July, a 3.0% decrease from the June pace of 667,000 units. On an unadjusted basis, MBA estimates that there were 54,000 sales in July, a 3.6% decrease from 56,000 in June.

By product type, conventional loans accounted for 50.0% of applications, FHA loans 34.6%, VA loans 13.6%, and RHS/USDA loans 1.8%. The average loan size decreased from $375,218 in June to $374,438 in July.

MBA Vice President and Deputy Chief Economist Joel Kan said:

“Purchase activity for newly built homes slowed in July, with both applications to purchase and the estimated number of new home sales falling behind last year’s pace. With new-home inventory still elevated, weaker demand likely reflects increased homebuyer sensitivity to higher mortgage rates. The annualized sales pace decreased for the third time in four months and at 647,000 units, fell below the average sales pace of 664,000 units during the first six months of the year.”