Mortgage applications for new homes increased 8.5% year-over-year in June, according to the Mortgage Banker Association. Applications were down 4% from May, but the report noted that is part of normal season trends. The numbers did not include seasonal adjustments.

The data is encouraging for the housing market, but Joel Kan, vice president and deputy chief economist at MBA, warned that there was still uncertainty in the months ahead.

"A cloudier economic outlook and elevated mortgage rates continues to weigh on potential buyers, while growing inventory, builder incentives, and lower prices have brought some buyers back to the market," Kan said. "As a result, we continue to see home sales ebb and flow."

The Builder Application Survey measures mortgage applications that companies receive directly from builders for new homes. The report gives a sense of how many new homes are being built, offering an indication of how strong the market is for both homebuilders and buyers.

An estimated 55,000 new homes were sold in June, according to the report, a 5.2% decline from May. The seasonally adjusted annual rate for new home sales was estimated at 667,000, up from 631,000 in May.

The average loan amount fell 8% to $376,077 from May. Half of the mortgage applications were for conventional loans, while about 35% were for FHA-backed loans. VA loans made up another 13.8% of the total applications.

The data was released on the same day that the National Association of Home Builders published their monthly sentiment survey finding. It found that builder confidence, while up slightly from June, was nonetheless hovering at one of the lowest levels since April 2020.

In a press release, the NAHB said that while they are optimistic after the recent passage of the One Big Beautiful Bill Act, they expect high interest rates and housing affordability to dampen demand.

"Single-family housing starts will post a decline in 2025 due to ongoing housing affordability challenges," said NAHB chief economist Robert Dietz in a statement.

The reports offer two more data points in what has been an uncertain housing market as of late. While Redfin found that the nationwide median home price hit a new high last week, some worry that cooling price growth could portend headwinds in the second half of the year.

Meanwhile, would-be buyers are still turned off by uncomfortably high rates. The 30-year mortgage rate has mostly fluctuated in the 6.7% to 7% range this year, with Freddie Mac's Freddie Mac Primary Mortgage Market Survey reporting an average rate of 6.75% as of July 17.