The Mortgage Bankers Association is forecasting that new home sales in July were down by 8 percent compared to June. Sales during the month will surpass those in July 2015 by 2.4 percent, the slowest year-over-year growth thus far in 2016. MBA bases its projections on its Builder Applications Survey (BAS) which gathers data on mortgage applications from the mortgage subsidiaries of new home builders. The month over month change in sales is not seasonally adjusted.
Lynn Fisher, MBA's Vice President of Research and Economists said, "Month over month declines in applications are part of the normal seasonal pattern this time of year and the Builder Applications Survey index has not maintained the momentum we saw during February and March."
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. Census Bureau data for July will be released on August 23.
When seasonally adjusted, MBA's estimate of new home sales rises by 1.9 percent from the June pace of 530,000 units. On an unadjusted basis, it estimates that there were 45,000 new home sales in July 2016, a decrease of 4.3 percent from 47,000 sales in June. MBA's June numbers were well below those reported by the Census Bureau; sales at a seasonally adjusted rate of 592,000 and 54,000 unadjusted.
The BAS showed that 68.5 percent of applications for new home purchases were for conventional loans and 17.2 percent were for FHA guaranteed mortgages. VA loan applications had a 13.6 percent share and RHS/USDA loans an 0.7 percent share. The average loan size of new homes decreased from $326,175 in June to $325,843 in July.