August new home purchase applications fell 17% year-over-year, according to the Mortgage Bankers Association’s Builder Application Survey. However, applications were up 9% compared to July.
The report shows new home sales rose 12% in August, the fastest pace of sales since January.
MBA estimated that new single-family home sales made up 874,000 units with seasonal adjustments. Unadjusted, MBA estimated there were 71,000 new home sales, up 10.9% from July.
“Mortgage applications to purchase new homes were down in August compared to 2020’s late-summer surge, but both mortgage applications and MBA’s estimate of new home sales jumped last month compared to July,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.
“While the new home construction market is a much smaller segment of the overall housing market, prospective buyers are increasingly turning to new homes because of the very low levels of existing homes for sale. Last month’s non-seasonally adjusted 9 percent increase in applications is an indication of greater than expected strength in demand, given that summer’s end is typically a slower period for new home purchases.”
Here are some more highlights from the report:
- Conventional loans: 75.1% of loan applications
- FHA loans: 13.8%
- RHS/USDA loans: 0.6%
- VA loans: 10.5%
- August average loan size: $406,922