June Sees Rise in Home Sales, Drop in Mortgages
Last month, mortgage lenders experienced a decline in applications for new home purchase mortgages. According to a survey conducted among mortgage subsidiaries of US builders by the the Mortgage Bankers Association (MBA), mortgage applications in June were down five percent from May. This represents the second month in a row of drops in mortgage activity, with an estimated eight percent decline between April and May.
Conventional loans in June represented the bulk of loan applications, with a total of 67.2% of the market. FHA made up 17%, VA loans made up 14.6%, and 1.2% represented loans from the Rural Housing Service and USDA. Among new home loans, the average loan size was $296,078, representing a slight decline from May’s average of $296,427.
Despite this drop in mortgage activity, it is estimated that new home sales rose in June. Based on their survey data and assumptions regarding the market coverage, MBA places June home sales at 386,000 units. This represents a 3.2% increase over the 374,000 units purchased in May.
