There was an increase in mortgage applications for new home purchases in July.
Applications jumped 11% month-over-month and 31.2% year-over-year (not seasonally adjusted) according to the Mortgage Bankers Association’s Builder Application Survey.
The survey is based on data from mortgage subsidiaries of home builders across the country.
“July’s strong new home sales increase on a monthly and annual basis was driven by the ongoing decline in mortgage rates, combined with steady housing demand and a still-healthy job market,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “The average loan size decreased last month, likely influenced by the increase in the first-time homebuyer share, as these buyers are likely to choose lower-priced, entry-level homes.”
The MBA estimates that home sales in July increased 16.7% from June to a seasonally adjusted annual rate of 754,000 units. Unadjusted, the estimate is 63,000 new home sales in July 2019, an increase of 8.6% from 58,000 new home sales in June.
Product types
The Builder Application Survey data shows that:
- Conventional loans composed 69.1% of loan applications;
- FHA loans composed 18.1%;
- RHS/USDA loans composed 1.0%;
- VA loans composed 11.7%
The average loan size of new homes decreased from $329,593 in June to $325,457 in July.
