According to the Mortgage Bankers Association's Builder Applications Survey for July 2016, mortgage applications in the U.S. for new home purchases increased 2.4 percent relative to a year ago. Compared to June 2016, applications decreased by 8 percent. The month over month change does not include any adjustment for typical seasonal patterns.
"Mortgage applications to home builders in July increased at the slowest year over year pace to date in 2016 at just 2.4 percent over a year ago," said Lynn Fisher, MBA's Vice President of Research and Economics. "Month over month declines in applications are part of the normal seasonal pattern this time of year and the Builder Applications Survey index has not maintained the momentum we saw during February and March."
By product type, conventional loans composed 68.5 percent of loan applications, FHA loans composed 17.2 percent, RHS/USDA loans composed 0.7 percent and VA loans composed 13.6 percent. The average loan size of new homes decreased from $326,175 in June to $325,843 in July.
MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 540,000 units in July 2016, based on data from the BAS. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.
The seasonally adjusted estimate for July is an increase of 1.9 percent from the June pace of 530,000 units. On an unadjusted basis, MBA estimates that there were 45,000 new home sales in July 2016, a decrease of 4.3 percent from 47,000 new home sales in June.