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Published July 19, 2024
July 18, 2024 | WASHINGTON, D.C. – The Mortgage Bankers Association (MBA) reported a slight increase in new home purchase mortgage applications for June 2024.The MBA's Builder Application Survey (BAS) data revealed a 0.7 percent increase compared to June 2023. However, compared to May 2024, there was a 16 percent decline in applications, a figure that doesn't account for typical seasonal patterns.
Joel Kan, MBA’s Vice President and Deputy Chief Economist, commented, “Applications for new home purchases slowed in June, consistent with broader declines in single-family construction and new building permits as well as typical seasonal patterns. The average loan size edged lower for the second consecutive month, and the share of FHA applications increased to 28.7 percent, as first-time buyers continue to account for a growing share of demand for newly built homes.”
Kan added, “MBA’s estimate of new home sales showed a monthly decline to a pace of 626,000 units – the slowest in four months. Mortgage rates dipped below 7 percent in June but that did little to spur purchase activity.”
MBA's estimates for new single-family home sales, a leading indicator of the U.S. Census Bureau’s New Residential Sales report, indicated a seasonally adjusted annual rate of 626,000 units in June 2024. This represents a 10.8 percent decrease from the May rate of 702,000 units. On an unadjusted basis, there were 52,000 new home sales in June 2024, down 17.5 percent from 63,000 in May.
The survey also provided insights into the types of loans used for new home purchases. Conventional loans made up 60.8 percent of applications, FHA loans 28.7 percent, RHS/USDA loans 0.3 percent, and VA loans 10.2 percent. The average loan size decreased slightly from $400,150 in May to $399,879 in June.
The MBA’s Builder Application Survey tracks application volumes from mortgage subsidiaries of home builders nationwide. This data, combined with other sources, enables MBA to offer early estimates of new home sales volumes at national, state, and metro levels, including the types of loans utilized by new home buyers. Official estimates are provided monthly by the Census Bureau, recording new home sales at contract signing, typically coinciding with the mortgage application.
For more details on MBA’s Builder Application Survey, check here.