Mortgage applications for new home purchases in June inched up 0.7% year-over-year but dropped by 16% month-over-month, according to new data from the Mortgage Bankers Association (MBA).
MBA estimated new single-family home sales were running at a seasonally adjusted annual rate of 626,000 units in June, a 10.8% drop from the May pace of 702,000 units. On an unadjusted basis, MBA estimated that there were 52,000 new home sales last month, a 17.5% decrease from 63,000 new home sales from one month earlier.
The average loan size for new homes decreased from $400,150 in May to $399,879 in June. By product type, conventional loans composed 60.8% of loan applications, FHA loans accounted for composed 28.7%, VA loans made up 10.2% and RHS/USDA loans occupied 0.3% of the market.
Joel Kan, MBA’s vice president and chief economist, observed, “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.”
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