Loan applications for new home purchases rose 3% in September over the previous year, but continued year-over-year growth could be subdued for the rest of 2016, according to the Mortgage Bankers Association.
New single-family home sales occurred at an estimated seasonally adjusted annual rate of 593,000 units in September, a 1.3% dip from August, the MBA's Builder Application Survey released on Thursday said. When compared with August, applications for new home purchase loans declined 7%, but that change is not seasonally adjusted.
"The monthly decline in mortgage applications in September is largely attributable to typical declines in building activity this time of year," Lynn Fisher, the MBA's vice president of research and economics, said in a news release.
"That said, builders are facing headwinds from rising labor costs. Looking forward, year-over-year growth in applications is likely to remain muted for the balance of 2016."
Conventional loans made up 68.8% of these applications, while Federal Housing Administration loans represented a 17.5% share. Additionally, USDA loans composed 0.9% of applications and VA loans 12.7%.
