Applications for financing new home purchases slipped in June in spite of the continued easing of mortgage interest rates. The Mortgage Bankers Association (MBA) said its Builder Application Survey (BAS) shows mortgage applications for new home purchases increased 17.9 percent compared from a year ago but were down 14 percent from the previous month. This change does not include any adjustment for typical seasonal patterns.

Based on survey data and assumptions regarding market coverage and other factors, MBA estimates that sales of newly constructed homes were at a seasonally adjusted annual rate of 646,000 units in June.  This is down 11.1 percent from the May pace of 727,000 units. On an unadjusted basis, MBA estimates that there were 58,000 new home sales, a 5.9 percent fewer than the 69,000 transactions in May.

"Ongoing concerns about economic growth and trade policy likely kept some potential buyers out of the market despite lower mortgage rates," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "Our seasonally adjusted estimate of new home sales was down in June after two of the strongest months in the survey's history dating back to 2013, but remained higher than a year ago. The average loan amount for new home purchase applications fell slightly to its lowest level since November 2018, as home price growth continued to slow in many markets and purchase transactions have shifted away from the higher end of the price spectrum."

Conventional loan applications accounted for 68.7 percent of the total and 18.0 percent were for FHA loans. VA applications composed 12.7 percent and 0.6 percent were RHS/USDA applications. The average loan size of new homes decreased from $330,311 in May to $329,593 in June.

MBA's Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country and uses the data 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 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 official report for June will be released on July 24.