Mortgage Applications Indicate July Dip in New Home Sales
Applications for the purchase of newly constructed homes fellrnoff slightly in July, a decline that the Mortgage Bankers Association (MBA)rnsaid was in line with the slowdown observed in the overall purchase mortgagernmarket. MBA’s BuilderrnApplication Survey (BAS) showed a 4 percent decrease in new home applications,rna change that does not include any adjustment for typical seasonal patterns.</p
Lynn Fisher, MBA’s Vice President of Research andrnEconomics said the change was driven in part by an increase in interest rates</brelative to earlier in the spring. Nonetheless the number of builderrnapplications was still up 15 percent compared to a year ago.</p
Applications for conventional loans comprised 63.4rnpercent of the total and FHA loans took an 18.8 percent share. VA loans and RHS/USDA loans had shares of 12.9rnpercent and 4.9 percent respectively. The average loan size of new homesrndecreased slightly, from $321,678 in June to $316,995 in July.</p
Based on data from the BAS, MBA projects that newrnsingle-family home sales were running at a seasonally adjusted annual rate ofrn534,000 units in July, an increase of 7.7 percent from the June estimate ofrn496,000 units. On an unadjusted basis newrnhome sales totaled 44,000 units, down 2.2 percent from the 45,000 sales projectedrnin June.</p
MBA’s Builder Application Survey tracksrnapplication volume from mortgage subsidiaries of home builders across therncountry. Utilizing this data, as well as data from other sources, MBA is ablernto provide an early estimate of new home sales volumes at the national, state,rnand metro level. Official new home sales estimates are conducted by the CensusrnBureau on a monthly basis. In that data, new home sales are recorded atrncontract signing, which is typically coincident with the mortgage application.
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