Higher Rates Weigh On New-Home Mortgage Demand
By CU Today Staff —
WASHINGTON—Mortgage applications to purchase newly built homes fell 5.7% in July from a year earlier as higher mortgage rates continued to pressure buyer demand, according to the Mortgage Bankers Association.
Applications were also down 1% from June, while MBA estimated new single-family home sales were running at a seasonally adjusted annual rate of 647,000 units, down 3% from June’s 667,000 pace.
“Purchase activity for newly built homes slowed in July, with both applications to purchase and the estimated number of new home sales falling behind last year’s pace,” said Joel Kan, MBA vice president and deputy chief economist. “With new home inventory still elevated, weaker demand likely reflects increased homebuyer sensitivity to higher mortgage rates.”
On an unadjusted basis, MBA estimated 54,000 new homes were sold in July, down 3.6% from June. Conventional loans accounted for 50% of applications, followed by FHA loans at 34.6%, VA loans at 13.6% and USDA loans at 1.8%. The average loan size slipped to $374,438 from $375,218 in June.
Originally reported by CU Today.