After months of heightened interest, mortgages for new single-family homes pulled back sharply in June, as lending activity significantly cooled.
Applications for new homes
By comparison, May's builder survey saw monthly applications grow 1% on a monthly basis and 13.8% annually. Data is compiled from mortgage lending subsidiaries of U.S. homebuilders.
"Applications for new-home purchases slowed in June, consistent with broader declines in single-family construction and new building permits as well as typical seasonal patterns," said Joel Kan, MBA's vice president and deputy chief economist, in a press release.
Sales of new single-family constructions proved to be a bright spot over the past two years in a market where elevated interest rates left existing homeowners
A fall in mortgage rates in June failed to boost the new-construction market, Kan said. "MBA's estimate of new-home sales showed a monthly decline to a pace of 626,000 units — the slowest in four months."
June's number was 10.8% lower than May's seasonally adjusted annual sales rate of 702,000, which was the highest mark since last fall.
In total, 52,000 new constructions were sold last month, 17.5% fewer than the 63,000 sales transactions recorded in May.
The share of properties financed by Federal Housing Administration-backed loans grew to 28.7% from 26.5% in May, hitting a survey high "as first-time buyers continue to account for a growing share of demand for newly built homes," Kan said.
The previous record share for FHA new-home mortgages, which are commonly used by first-time buyers, was 27.1% last November.
Among other types of loans in the government segment,
The share of conventional applications relative to total volume came in at 60.8%, down from 63.4% a month earlier.
The average loan size for new single-family constructions in June fell under the $400,000 mark to $399,879. The figure dropped for the second month in a row and represented a pullback of than one-tenth of 1% from May's mark of $400,150.
