The number of applications for residential mortgages in July decreased by 27.4% y / y

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The number of mortgage applications for new home purchases in July 2021 decreased by 27.4% compared to the same month last year, according to a survey of builders conducted by the Mortgage Bankers Association.

According to the survey, compared to June 2021, the number of applications decreased by 4%. The MBA noted that this change does not include adjustments for typical seasonal fluctuations.

“New home mortgage applications declined in July – which is typical of most summer seasons when home sales start to decline – but they ranked second in July since the MBA study began in 2012,” said Joel Kahn, MBA … Deputy Vice President for Economic and Industry Forecasts: “In addition, the average loan size increased again to … a record $ 402,440.”

Kang said that home developers continue to face “increased construction costs and accelerated growth in house prices due to the ongoing imbalance between supply and demand.”

He noted that after seasonally adjusted, the MBA’s estimate of annual new home sales showed a jump of more than 10 percent from June.

Kahn added that the housing market “is still extremely competitive and potential buyers are increasingly turning to newly built homes because stocks for sale remain so low.”

According to the survey, the MBA estimates that the seasonally adjusted annual sales of new single-family homes totaled 779,000 units in July 2021. Estimates of new home sales are based on survey information about mortgage applications, as well as assumptions about market coverage and other factors.

The seasonally adjusted estimate for July is an increase of 10.7% over the June rate of 704,000 units. On an unadjusted basis, the MBA estimated that 64,000 new homes were sold in July 2021, down 3% from the 66,000 new home sales in June.

By product type, conventional loans accounted for almost 74% of loan applications; FHA loans accounted for 14.6%, RHS / USDA loans accounted for 0.8%, VA loans accounted for 10.8%. The average loan for new home construction increased to $ 402,440 in July from $ 392,370 in June.

The MBA Builder Application Survey tracks the volume of applications from mortgage subsidiary builders nationwide. Using this data and data from other sources, the MBA provides an early estimate of national, state, and municipal new home sales. This data also provides information on the types of loans used by new home buyers.

Official estimates of new home sales are conducted monthly by the Census Bureau. This data records new home sales when the contract is signed, which usually coincides with a mortgage application.

For more information on the MBA Builder Application Survey, click here

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