Applications for new home purchases plummeted in August, pointing to continued weakness in a market segment that has disappointed throughout the year.
The Mortgage Bankers Association's (MBA) Builder Application Survey tumbled 9 percent month-over-month in August, according to the latest from the group. The decline does not include any seasonal adjustments.
Based on application volume collected by mortgage subsidiaries of homebuilders nationwide, MBA estimates new home sales last month ran at a seasonally adjusted annual rate of 424,000, down 2.1 percent from the association's estimate of 433,000 for July.
The anticipated decline follows a 2.4 percent drop in July new home sales as reported by the Commerce Department. According to initial estimates from the government, sales that month were at an adjusted annual pace of 412,000.
On an unadjusted basis, MBA estimates August saw 34,000 new home sales, a monthly decrease of 8.1 percent.
By product type, MBA reports conventional loans made up 68.9 percent of new home purchase applications last month, up slightly from July, while the share of Federal Housing Administration (FHA)-insured loans fell slightly to 15.7 percent.
Meanwhile, the percentage mortgages insured by the Department of Veterans Affairs rose to 14.3 percent, while rural housing loans fell to 1 percent.
The average loan size for a new home increased more than $3,000 from July to August, coming in at $300,443.