Mortgage apps for new homes rise on rising starts

There was an increase in mortgage applications for new homes in July, a 3.6% rise year-over-year.

The Mortgage Bankers Association’s Builder Applications Survey shows a 0.2% increase month-over-month.

Based on the data and other factors, the MBA estimates that new home sales totalled 637,000 on a seasonally-adjusted annualized rate basis, the strongest since April 2018 and an 8.5% rise from June.

“This was likely supported by the May surge in housing starts and is a reflection of the strength of demand due to the healthy economy. Because inventory of existing homes remains quite tight, this increase in new home supply will be welcomed by the market," said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting.

Conventional loans composed 72.1% of loan applications, FHA loans composed 15.3%, RHS/USDA loans composed 1.1% and VA loans composed 11.4%. The average loan size of new homes increased from $333,033 in June to $337,775 in July.