Applications for mortgages to purchase newly constructed homes posted what was termed a seasonal decline in June.  The Mortgage Bankers Association said its Builder Application Survey (BAS), which is conducted among mortgage subsidiaries of home building companies, decreased in June, but remains 10 percent higher than a year earlier.

MBA uses application and market coverage data to project sales of newly constructed homes. It estimates that, on a non-adjusted basis, there were 55,000 new home sales in June 2017, a decrease of 3.5 percent from 57,000 new home sales in May. Their seasonally adjusted annual estimate of 628,000 units for June is an increase of 3.8 percent from the May pace of 605,000 units and is up 18 percent year-over-year.

"We are at the part of the season where housing market activity normally begins to slacken and this was true for mortgage applications for new homes in June. That said, activity was up by 10 percent relative to one year ago," said Lynn Fisher, MBA's Vice President of Research and Economics. "The shortage of existing housing supply should keep pressure on prices and new homebuilding throughout the balance of this year and into next.

Seventy percent of mortgage applications were for conventional loans and 16.7 percent were for those backed by FHA.  RHS/USDA loan applications accounted for 1.3 percent of the total and VA loans had a 12 percent share. The average loan size of new homes increased from $324,844 in May to $327,833 in June.

MBA's use of BAS data allows it to provide an early estimate of new home sales volumes at the national, state, and metro level as well as the types of loans used by new home buyers. Official new home sales estimates are conducted by the Census Bureau.  It counts new home sales at contract signing, which is typically coincident with the mortgage application. The June report of new home sales will be released on July 26.