Home buyers were more active in purchasing newly constructed properties in July, rebounding
Loan volume for this segment jumped by 0.2% from June and was up 35.5% compared to the year prior, the trade group's Builder Application Survey found. This is despite a
The overall number of new single-family home sales was at a seasonally adjusted annual rate of 677,000 units in July 2023, a 1.5% decrease from the month prior. Unadjusted new home sales reached 56,000 in July, a 6.7% decrease from 60,000 new home sales in June.
"Applications for purchase loans on newly constructed homes remained strong in July, up 36% annually, as new homes continued to account for a growing share of homes available for sale," said Joel Kan, deputy chief economist at the MBA in a written statement Tuesday.
Conventional mortgages continued to dominate the share of applications, making up 65.3% of all loans, slightly down from 65.5% the month prior. The percentage of U.S. Department of Agriculture loans remained unchanged at 0.3%.
However, the two categories which saw growth were the share of VA and FHA applications, which increased to 10.2% and 24.2%, respectively. The FHA share in July represented its highest since May 2020, noted Kan.
"FHA purchase loans are a popular option for many first-time homebuyers and this increasing trend in the FHA share is indicative of more first-time buyers looking to new homes as an option, given the lack of for-sale inventory among existing homes and challenging affordability conditions," he said.
Meanwhile, the average loan size for new homes decreased from $400,281 in June to $397,148 in July, the survey said. In May, the average loan size was $403,581.
