Last month, mortgage applications for new home purchases increased by 20.6% compared to a year ago. They’re up 4% from July, according to new data from the Mortgage Bankers Association (MBA). These numbers do not reflect any adjustments for seasonal patterns.
On an unadjusted basis, MBA estimates that there were 59,000 new home sales in August 2023. That’s an increase of 5.4% from 56,000 new home sales in July.
“There was strong purchase demand in August for newly constructed homes, as existing for-sale inventory remains low with most homeowners locked into lower mortgage rates and unwilling to give those rates up in this higher rate market,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Despite the 30-year fixed rate averaging over 7 percent in August, applications for new home purchase loans increased over the month and from a year ago.”
Kan added that the FHA share of applications dropped a bit in August but is still close to survey highs. This, he says, shows new home sales are driven by a larger share of first-time homebuyers.
“Our estimate of new home sales showed a 4 percent increase to the strongest pace of sales in three months at 702,000 units,” he said.
MBA’s seasonally adjusted estimate of new single-family homes is a 3.7% increase from July’s 677,000 units. On an unadjusted basis, MBA estimates that there were 59,000 new home sales in August 2023, an increase of 5.4 percent from 56,000 new home sales in July.
By product type:
- Conventional loans comprised 65.8% of loan applications
- FHA, 23.8%
- RHS/USDA, 0.2%
- VA, 10.2%.
The average loan size for new homes was $398,092 in August 2023. In July, it was $397,148.
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