Purchase loans for newly built homes leaped 20.6% in August compared to one year earlier and 4% month-over-month on an unadjusted basis, according to the MBA's builder application survey. While still a substantial upswing, the latest figures are
"There was strong purchase demand in August for newly constructed homes, as existing for-sale inventory remains low with most homeowners locked into lower mortgage rates and unwilling to give those rates up in this higher rate market," said Joel Kan, MBA vice president and deputy chief economist, in a press release.
Despite interest-rate and other affordability challenges, many aspiring buyers have
Recent data from Redfin estimated over 30% of total listings on the market in the second quarter were newly built units. The pickup in new business has led to a
The MBA estimated new single-family home sales ran at a seasonally adjusted annual rate of 702,000 in August, the strongest pace in three months, Kan said. The number was up 3.7% from 677,000 in July and 0.4% from 699,000 a year ago.
Approximately 59,000 new homes were sold during the month, up from 56,000 in July. Average loan size for purchases rose to $398,092, compared to $397,148 one month prior.
First-time buyers are driving much of the momentum behind the recent upturn in sales, Kan said. "The FHA share of applications dipped slightly in August but remains close to survey highs, indicating that a larger share of first-time homebuyers is supporting the new home sales market."
Loans guaranteed by the Federal Housing Administration nabbed a 23.8% share, just off 24.2% recorded in July, which was the highest portion in over three years. New-home applications in the conventional market made up 65.8%, up from 65.3%.
Meanwhile, applications guaranteed by the Department of Veterans Affairs garnered a 10.2% share, the same as in July. Loans sponsored the U.S. Department of Agriculture's Rural Housing Service made up 0.2% of originations, inching down from 0.3%.