Takeaways:
- New-home sales activity will slow in the coming months, a historical seasonal occurrence.
- Conventional loans account for nearly 70 percent of all applications/loans used.
- Applications are still up nearly 20 percent on a year-to-year basis.
As fall approaches, new-home sales activity historically begins to slow in comparison to the summer months.
Recent data from the Mortgage Bankers Association (MBA) indicates that the slowdown has already begun, as mortgage applications for new-home purchases dropped by 6 percent in August when compared to July.
“However, applications for new homes were still up 19 percent relative to the same month last year,” noted Lynn Fisher, the association’s VP of research and economics.
By product type, conventional loans composed 68.5 percent of all loan applications in August. FHA loans accounted for 19 percent, with RHS/USDA loans and VA loans representing 0.9 percent and 11.6 percent of all loans, respectively.
The average loan size increased from $316,995 in July to $317,035 in August.
Additionally, the association’s Builder Application Survey estimates there were 41,000 new-home sales in August, a month-to-month decrease of 6.8 percent. Roughly 44,000 new homes sold in July.
The MBA estimates new-home sales were running at a seasonally adjusted annual rate of 524,000 units in August, a decrease of 1.9 percent from the July pace of 534,000 units.
