Mortgage applications for new home purchases in May were down by 3% from the prior month, but they were also up by 3.8% from one year earlier.
According to the Mortgage Bankers Association, new single-family home sales were at a seasonally adjusted annual rate of 642,000 units in May, a 2% decline from April. 2 percent from the April pace of 655,000 units. On an unadjusted basis, the MBA estimated there were 58,000 new home sales last month, a 3.3% drop from 60,000 new home sales in April.
The average loan size for new homes decreased from $378,384 in April to $372,825 in May. By product type, conventional loans composed 49.6% of loan applications, compared to 35.6% for FHA loans. VA loans accounted for 13.7% of loans while RHS/USDA loans composed 1.1%.
Joel Kan, MBA’s vice president and deputy chief economist, observed, “Even as home builders continue to offer concessions to increase sales, homebuyers have been hesitant because of higher prices, increased economic uncertainty, and mortgage rates averaging over 6.5% in May. The average loan size to purchase a new home was at the lowest level in 10 months at $372,825, consistent with government loans accounting for more than half of applications for the fifth consecutive month.”
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