Mortgage applications for new home purchases fell for a fifth consecutive month in August, as higher mortgage rates continued to weigh on demand, according to the Mortgage Bankers Association (MBA)’s Builder Application Survey released Tuesday.
Applications declined 5.5% from a year earlier and 6% from July. The figures are not adjusted for seasonal patterns.
“Increasing mortgage rates continue to put pressure on new home sales activity,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement.
The MBA estimated that new home sales ran at a seasonally adjusted annual rate of 664,000 units in August, up 2.6% from July’s pace of 647,000. Despite the monthly increase, the August estimate was 9% below the year-ago pace.
On an unadjusted basis, the MBA estimated 52,000 new-home sales in August, down 3.7% from 54,000 in July.
The decline in mortgage applications came as more buyers turned to Federal Housing Administration(FHA) loans, which accounted for 35% of applications in August, the highest share in three months.
Conventional loans accounted for 49.5% of applications, while U.S. Department of Veterans Affairs(VA) loans made up 13.9% and U.S. Department of Agriculture(USDA) loans accounted for 1.7%.
The average loan amount for a new home declined to $373,194 in August, down from $374,438 in July.
The MBA’s Builder Application Survey tracks mortgage applications from homebuilder-affiliated lenders nationwide. The data provides an early estimate of new-home sales and information on the types of loans used by new-home buyers.
This article was generated using HousingWire Automation and reviewed by a HousingWire editor before publication.