There was an increase in mortgage applications for new home purchases in June compared to a year earlier.
The Mortgage Bankers Association’s Builder Application Survey (BAS) gained 17.9% year-over-year but was down 14% month-over-month (not seasonally adjusted).
“Ongoing concerns about economic growth and trade policy likely kept some potential buyers out of the market despite lower mortgage rates,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.
MBA estimates that new single-family home sales were running at a SAAR of 646,000 units in June 2019 based mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.
“Our seasonally adjusted estimate of new home sales was down in June after two of the strongest months in the survey’s history dating back to 2013 but remained higher than a year ago,” added Kan.
By product type, conventional loans composed 68.7% of loan applications, FHA loans composed 18.0%, RHS/USDA loans composed 0.6% and VA loans composed 12.7%.
Average loan size decreased
The average loan size of new homes decreased from $330,311 in May to $329,593 in June.
“The average loan amount for new home purchase applications fell slightly to its lowest level since November 2018, as home price growth continued to slow in many markets and purchase transactions have shifted away from the higher end of the price spectrum,” concluded Kan.