Applications for the purchase of newly constructed homes fell off slightly in July, a decline that the Mortgage Bankers Association (MBA) said was in line with the slowdown observed in the overall purchase mortgage market.  MBA's Builder Application Survey (BAS) showed a 4 percent decrease in new home applications, a change that does not include any adjustment for typical seasonal patterns.

Lynn Fisher, MBA's Vice President of Research and Economics said the change was driven in part by an increase in interest rates relative to earlier in the spring. Nonetheless the number of builder applications was still up 15 percent compared to a year ago.

Applications for conventional loans comprised 63.4 percent of the total and FHA loans took an 18.8 percent share.  VA loans and RHS/USDA loans had shares of 12.9 percent and 4.9 percent respectively. The average loan size of new homes decreased slightly, from $321,678 in June to $316,995 in July.

Based on data from the BAS, MBA projects that new single-family home sales were running at a seasonally adjusted annual rate of 534,000 units in July, an increase of 7.7 percent from the June estimate of 496,000 units.  On an unadjusted basis new home sales totaled 44,000 units, down 2.2 percent from the 45,000 sales projected in June.

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. Official new home sales estimates are conducted by the Census Bureau on a monthly basis. In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.