New Home Mortgage Applications Plummet in August

The Mortgage Bankers Association (MBA) said that applications for mortgages to purchase new homes dropped 14 percent in August to a seasonally adjusted annual rate of 424,000 units.  On an unadjusted basis there were an estimated 35,000 applications for new home purchases during the month.

An estimated 67.8 percent of the loan applications were for conventional mortgages and 17.3 percent were for FHA-backed loans.  VA loans made up 13.9 percent of applications and those for Rural Housing/USDA loans a slight 1.0 percent.

The average size of the loan for which applications were made dropped slightly from $288,382 in July to $284,392 in August. 

New home sales data from the U.S. Census Bureau is not yet available for August and the two sets are not directly comparable. MBA's information is from surveys of mortgage subsidiaries regarding applications during the month.  The official government estimate of new home sales records those sales at contract signing.  Census Bureau data for August will be released on September 25.