With interest rates lower than expected and existing-home prices driving demand, applications for new-home purchases rebounded in August, increasing 6.8% from the previous year, according to the Mortgage Bankers Association.
New-home purchase applications grew by 7% from July to August.
By product type, 71.9% of these applications were for conventional loans and 14.4% for Federal Housing Administration loans. Department of Veterans Affairs loans comprised 12.7% of new-home purchase applications and Rural Housing Service/U.S. Department of Agriculture loans made up 0.9%.
The average loan size grew by $5,457 from July to August.
"Average loan size for new homes increased in August to $334,940, the highest level since the series began," said Lynn Fisher, vice president of research and economics for the Mortgage Bankers Association, in a press release.
"More than one-third of applications for new homes in our August survey came from Florida and Texas. It is unclear what impact hurricanes Harvey and Irma will have on housing starts in the region in coming months, but it is likely that recent new home sales will be delayed in breaking ground," she said.
And in addition to this potential delay, storms like Harvey may reshape how and where Americans build homes, as builders and developers typically want to keep homes as inexpensive as possible, rather than favoring tighter building codes and taking in to account vulnerable locations the way insurers do.
New single-family home sales were running at a seasonally adjusted annual rate of 665,000 units in August, according to MBA estimates.