Home sales also picked up speed with 785,000 units sold
The Mortgage Bankers Association (MBA) found that low rates and increased home sales have driven a surge in mortgage applications for new-home purchases.
New home mortgage applications saw a 33% annual gain in August, according to data from MBA’s Builder Application Survey (BAS). On a monthly basis, applications inched down 0.2% from July.
MBA reported that new single-family home sales were growing at a seasonally adjusted year-over-year rate of 785,000 units in August. The estimate rose 4.1% from the July pace of 754,000 units. On an unadjusted basis, the pace for new home sales was 61,000, down 3.2% from 63,000 units in July.
"New-home purchase activity was robust in August, as both mortgage applications and estimated home sales increased from a year ago," said Joel Kan, associate vice president of economic and industry forecasting at MBA. "Recent increases in new residential housing permits and housing starts, lower mortgage rates, and a still-strong job market all bode well for the new home sales outlook."
Conventional loans made up the majority of loan applications at 69.3%. FHA loans composed 18.1%, while VA loans and RHS/USDA loans comprised 11.8% and 0.8%, respectively. The average loan size for new homes climbed from $325,457 in July to $332,497 in August.
