The Mortgage Bankers Association (MBA) says that responses to its recent Mortgage Builder Applications Survey indicates an increase of 3.6 percent in applications for financing newly constructed homes in July compared to the same month in 2017.  That is an 0.2 percent uptick from June.

Based on the survey results, which are not seasonally adjusted, and other assumptions about factors that include market coverage, MBA estimates that new single-family home sales were running at a seasonally adjusted annual rate of 637,000 in July.  This is an 8.5 percent increase from MBA's June estimate of 587,000 units. On an unadjusted basis, MBA estimates that there were 53,000 new home sales during the month, the same number as in June.

Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting commented, "Our survey results indicate that new home sales for the month reached 637,000 units, the strongest pace since April 2018. This was likely supported by the May surge in housing starts and is a reflection of the strength of demand due to the healthy economy. Because inventory of existing homes remains quite tight, this increase in new home supply will be welcomed by the market."

Conventional loans were the target of 72.1 percent of loan applications while FHA loans received 15.3 percent of the total submitted.  RHS/USDA loans and VA loans had respective shares of 1.1 percent and 11.4 percent. The average loan size of new homes increased from $333,033 in June to $337,775 in July.

MBA's Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country. Utilizing this data, as well as data from other sources, MBA is able to provide an early estimate of new home sales volumes at the national, state, and metro level. This data also provides information regarding the types of loans used by new home buyers. Official new home sales estimates are provided by the Census Bureau and the Department of Housing and Urban Development on a monthly basis. In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.  The July report on new home sales will be released on August 23.