The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for July 2023 shows mortgage applications for new home purchases increased 35.5 percent compared from a year ago. Compared to June 2023, applications increased by 0.2 percent. This change does not include any adjustment for typical seasonal patterns.
“Applications for purchase loans on newly constructed homes remained strong in July, up 36 percent annually, as new homes continued to account for a growing share of homes available for sale,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The FHA share of purchase applications was 24.2 percent, the highest share since May 2020, and has increased in four of the last five months. FHA purchase loans are a popular option for many first-time homebuyers and this increasing trend in the FHA share is indicative of more first-time buyers looking to new homes as an option, given the lack of for-sale inventory among existing homes and challenging affordability conditions.”
MBA estimates new single-family home sales, which has consistently been a leading indicator of the U.S. Census Bureau’s New Residential Sales report, is that new single-family home sales were running at a seasonally adjusted annual rate of 677,000 units in July 2023. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.
The seasonally adjusted estimate for July is a decrease of 1.5 percent from the June pace of 687,000 units. On an unadjusted basis, MBA estimates that there were 56,000 new home sales in July 2023, a decrease of 6.7 percent from 60,000 new home sales in June.
By product type, conventional loans composed 65.3 percent of loan applications, FHA loans composed 24.2 percent, RHS/USDA loans composed 0.3 percent and VA loans composed 10.2 percent. The average loan size for new homes decreased from $400,281 in June to $397,148 in July.
MBA’s Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country. Utilizing this data, as well as data from other sources, MBA is able to provide an early estimate of new home sales volumes at the national, state, and metro levels. This data also provides information regarding the types of loans used by new home buyers. Official new home sales estimates are conducted by the Census Bureau on a monthly basis. In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.
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