Mortgage Applications for New Home Purchases Lower in July

Applications for new home purchases dropped 4 percent in July compared to the prior month, according to the Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for July 2015.

No adjustment for typical seasonal patterns are included in this change, MBA reports.

"Mortgage applications to home builder subsidiaries for new homes declined at a rate in line with the slowdown observed in the overall purchase mortgage market," said Lynn Fisher, MBA's VP of Research and Economics. "This was driven in part by an increase in interest rates relative to earlier in the spring. Nonetheless the number of builder applications was still up 15 percent compared to a year ago."

Conventional loans made up 63.4 percent of loan applications, FHA loans made up 18.8 percent, RHS/USDA loans made up 4.9 percent, and VA loans made up 12.9 percent. The average loan size of new homes decreased from $321,678 in June to $316,995 in July.

The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 534,000 units in July 2015, based on data from the BAS. The new home sales estimate is calculated using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.

The seasonally adjusted estimate for July is an increase of 7.7 percent from the June pace of 496,000 units. On an unadjusted basis, the MBA estimates that there were 44,000 new home sales in July 2015, a decrease of 2.2 percent from 45,000 new home sales in June.