Mortgage applications for new homes down 12% in June

Mortgage applications for new home purchases in June were down 12% from a year ago, according to the Mortgage Bankers Association’s (MBA) latest construction application survey (BAS). Compared to May, requests have decreased by 10%.

“Rising mortgage rates and heightened economic uncertainty dampened borrower demand in June, causing new home purchase applications to fall to the lowest level since April 2020,” said Joel Kan, vice president. MBA Economic and Industrial Forecasting Associate. “In addition, new home construction and permitting activity weakened from March through May, reducing the number of homes available to homebuyers. MBA’s estimate of new home sales for June fell at a rate of 620,000 homes, a 15% drop of more than 100,000 units from May.

The MBA estimates that sales of new single-family homes proceeded at a seasonally adjusted annual rate of 620,000 units in June, based on data from the BAS. The new home sales estimate is derived from mortgage application information from the BAS, as well as assumptions about market coverage and other factors.

The seasonally adjusted estimate for June is a decrease of 14.7% from May’s pace of 727,000 units. On an unadjusted basis, MBA estimates there were 57,000 new home sales in June, down 6.6% from 61,000 new home sales in May.

By product type, conventional loans accounted for 73.7% of loan applications, FHA loans 15%, RHS/USDA loans 0.5%, and VA loans 10.7%. The average loan amount for new homes fell from $430,855 in May to $426,966 in June.

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