Residential headwinds slow down mortgage applications for new home purchases

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“In addition, the still low levels of stock for sale are also pushing prices up as competition for available units among potential buyers remains high,” added Kahn. “Applications for the purchase of new homes are falling for the third month in a row, while the average loan amount rose to a new all-time high of $ 392,370. In addition to rising prices, we are also seeing a decrease in the number of purchases at lower price levels, as more of these potential buyers are excluded from the market, further putting upward pressure on loan balances. ”

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According to MBA estimates, sales of new single-family homes in June fell to their lowest level since May 2020 at 704,000 units. This is 5% less than in May (741,000 units). On an unadjusted basis, the MBA estimates that new home sales were 66,000 in June, down 2.9% from 68,000 homes sold in May.

“The average sales rate has remained strong at 738,000 over the past three months, but it is still about 7% lower than the 2020 average,” Kahn said. “Last year was the most successful year for new home sales in over a decade.”

By product type, conventional loans accounted for 74.4% of loan applications, FHA loans accounted for 14%, RHS / USDA loans accounted for 1% and VA loans accounted for 10.6%. The average loan for new home construction increased from $ 384,323 in May to $ 392,370 in June.



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