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New Home Purchases Drop in June

Applications for new home purchases slipped again in June, though the annualized rate of new home sales is forecast to have increased.

The Mortgage Bankers Association's (MBA) Builder Applications Survey (BAS), a gauge of application volume from mortgage subsidiaries of homebuilders, suggests new home purchase applications slipped 5 percent from May to June, the group reported Thursday. The change does not include any adjustments for typical seasonal movements.

Using application data from the survey and other assumptions about the market, MBA estimates sales of new homes last month ran at a seasonally adjusted annual rate of 386,000 units, an increase of 3.2 percent from May's unrevised estimate of 374,000.

Figures from the Census Bureau put new home sales at an adjusted annual pace of 504,000 in May, a significant increase and substantially higher than MBA's estimate. That data is based on contract signings.

Government estimates for new home sales in June are scheduled to come out July 24.

On an unadjusted basis, the association estimates there were 36,000 new home sales in June, flat from May's total.

MBA reports conventional loans made up 67.2 percent of new purchase applications in June. Mortgages backed by the Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA) accounted for 17.0 percent and 14.6 percent, respectively, while loans through rural services agencies made up 1.2 percent.

The average loan size of new homes was $296,078, down nearly $350 from May.


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