Mortgage applications for new home purchases during July were down by 1% from the prior month and down 5.7% from one year before, according to new data from the Mortgage Bankers Association (MBA).
The MBA estimated new single-family home sales were running at a seasonally adjusted annual rate of 647,000 units in July, a 3% decline from the June pace of 667,000 units. On an unadjusted basis, MBA estimates that there were 54,000 new home sales last month, a decrease of 3.6% from 56,000 new home sales from one month earlier.
The average loan size for new homes decreased from $375,218 in June to $374,438 in July. By product type, conventional loans composed 50% percent of loan applications while FHA loans accounted for 34.6%, VA loans for 13.6%, and RHS/USDA loans for 1.8%.
“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,” said Joel Kan, MBA’s vice president and deputy chief economist. “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.”
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