MBA: July New Home Mortgage Applications Up 9.4%

According to the Mortgage Bankers Association (MBA), in July 2024, mortgage applications for new home purchases rose by 9.4% compared to the previous year and 9% from June 2024. This increase was driven by strong demand for new homes and declining mortgage rates. Notably, the FHA share of applications reached a record 29%, highlighting the significant role of first-time buyers in the market despite the limited availability of starter homes.

The MBA estimates that new single-family home sales in July were at a seasonally adjusted annual rate of 677,000 units, reflecting an 8.1% increase from June’s pace of 626,000 units. On an unadjusted basis, July saw 57,000 new home sales, up 9.6% from June. The average loan size for new homes slightly decreased, from $399,879 in June to $393,344 in July. Conventional loans comprised 60.1% of applications, with FHA, VA, and RHS/USDA loans comprising the rest.

July Housing Starts Hit Four-Year Low

Housing starts dropped 6.8% from June to July, reaching a seasonally adjusted annual rate of 1.238 million, marking a 16% decline from the previous year and the slowest pace in four years. Single-family starts saw a sharper decrease of 14.1%, with a year-over-year decline of 14.8%. Despite these declines, single-family starts are up 11.4% yearly. The slowdown in new construction is linked to credit tightening, high loan rates for builders, and ongoing challenges like worker shortages and supply chain issues.

Permitting activity also decreased, with overall residential permits down 4% from June and 7% annually. Single-family permits remained relatively stable month-over-month but were 1.6% lower than last year. Builder sentiment has deteriorated as interest rates remain high, leading to fewer homes under construction. However, new-home completions remain strong, offering some relief to the market by increasing housing inventory, which could help alleviate pricing pressures.

Redfin: July Existing-Home Sales Hit Record Low Since 2012

In July, existing home sales slightly increased by 0.6% compared to the previous month but dropped 2% year-over-year, reaching the lowest level for July since 2012. Despite recent declines in mortgage rates, home prices remained high, with the median sales price rising 4.1% from last year to $439,170, just shy of the all-time high. Pending sales also declined, down 2.9% from June and 5.8% compared to last year.

The supply of homes for sale increased by a record 13.7% year-over-year, though it slightly decreased from June. Only 33.2% of homes sold above the asking price, marking the lowest percentage for any July in four years. Additionally, nearly 15.8% of home-purchase agreements were canceled, the highest rate for July since 2017, with buyers in Florida and Texas leading in deal cancellations.