July New Home Purchase Mortgage Apps Jump 39% Year-Over-Year

The Mortgage Bankers Association's July 2020 Builder Application Survey revealed that mortgage applications for new home purchases jumped 39% compared to 2019 and up 1% compared to June 2020.

"New home sales activity continued to rebound in July after a pandemic induced low point in April 2020. In fact, applications for new home purchases with home builder affiliates were 39 percent higher than in July 2019," said Joel Kan, MBA's assistant vice president of economic and industry forecasting. "On an unadjusted basis, new home sales were estimated to be up 14 percent over the year and showed year over year gains for the second consecutive month in July."

"Typically, new home purchases peak in April and then decline through the remainder of the year. With the disruption this spring, seasonal patterns are not holding, and hence the seasonal adjustment is likely overstating the increase for this month. While this is a signal of still strong demand for housing, we remain concerned about supply. Housing starts have not kept up with demand and this could hold back the pace of sales in the coming months."

The MBA survey revealed that the seasonally adjusted estimate for July is an increase of 15% from June's pace of 774,000 units. On an unadjusted basis the MBA estimates that there were 72,000 new home sales in July 2020, a 1.4% increase from June.

Read more from the Builder Application Survey.