Mortgage Applications to Buy New Homes Rebound in July

Mortgage applications to purchase new homes rebounded 14% in July after a 15% drop in June, according to a Mortgage Bankers Association survey.

Mortgage rates rose rapidly in June and it may have forced “some prospective buyers to pause,” according to MBA vice president Mike Fratantoni. But they got back in and signed the applications in July.

The newly introduced MBA Builder Application Survey shows that 66.5% of borrowers applied for conventional loans in July and 33.5% applied for government-backed loans.

The breakdown for government-backed loans was 17.7% FHA loans, 14.5% VA loans and 1.3% Rural Housing loans.

The MBA economist commented that the VA share rose a full percentage point from 13.4% in June. The “strong VA presence” could reflect the concentration of veterans in living in the Sun Belt and Western states, which have the hottest new home sale markets.

The MBA estimates new home sales were running at a seasonally adjusted annual rate of 481,000 in July. The MBA’s forecast calls for 464,000 new home sales in 2013, up 26% from last year.