Mortgage applications for new home purchases were up 5% in August from the previous month, according to the latest report from the Mortgage Bankers Association (MBA).
The approximate volume of new single-family home sales were estimated by the MBA at a seasonally adjusted annual rate of 601,000 units in August 2016. An increase of 11.3% from the previous month’s pace of 540,000 units. The unadjusted numbers were 48,000 new home sales in August 2016, up 6.7% from 45,000 new home sales in July.
Conventional mortgage applications had the largest share of volume with 67.7% of total loan applications, followed by FHA loans at 18.4%, RHS/USDA loans at 0.7% and VA loans composed 13.2%. The average loan size of new homes decreased from $325,843 in July to $325,224 in August.
The MBA’s Vice President of Research and Economics, Lynn Fisher said this about the latest report.
“Applications for new home purchase mortgages were up in August on an unadjusted basis following a sluggish July. New home purchase applications increased 5 percent over the month and increased more than 14% compared to August a year ago. Based on the applications data, our estimate of seasonally adjusted new home sales for August reached 601,000 sales, the highest level observed in our survey since it began in 2012.
While our new home sales estimates have trailed the recent Census data, the increase in our series in August, which derives from a different source of data compared to the Census, provides some corroboration that single-family building activity has remained strong even as the summer winds down. Our sense is that builders have been attempting to catch up with demand in the face of labor shortfalls and other limiting factors in various parts of the country.”