Mortgage applications for new home purchases in June were up 10 percent compared to June 2016, according to the latest Builder Application Survey released by the Mortgage Bankers Association (MBA)
. However, on a month-over-month measurement, applications saw a four percent drop.
The MBA estimated new single-family home sales were running at a seasonally adjusted annual rate of 628,000 units in June, an increase of 3.8 percent from the May pace of 605,000 units. On an unadjusted basis, the MBA estimated that there were 55,000 new home sales in June, a decrease of 3.5 percent from 57,000 new home sales in May. The average loan size of new homes increased from $324,844 in May to $327,833 in June, and 70 percent of loan applications were for conventional home loans.
Lynn Fisher, MBA’s Vice President of Research and Economics, noted the ongoing problems with inventory as a driving force in the market. “The shortage of existing housing supply should keep pressure on prices and new homebuilding throughout the balance of this year and into next,” she said. “The June application data leads us to believe that new home sales in June will come in at 628,000 units on a seasonally adjusted basis which is 18 percent higher than for the same period last year.”