Mortgage applications are up by 6.8 percent year-over-year in August, according to new data released by the MBA. In comparison to July’s data, applications were up 7.0 percent in August. These numbers do not reflect any seasonal adjustments.
The average size of the loan also increased to $334,940, which is up from $349,483 in July and a record since the MBA started tracking the data. According to the report, the largest number of new mortgage applications came from the states of Texas and Florida, although it is uncertain as to how the fallout from Hurricane Harvey and Hurricane Irma will affect the progress of new home starts in the near future.
The MBA attributes the increase in mortgage applications to low mortgage interest rates and a continued rise in home prices. "Mortgage applications for new homes rebounded a bit in August, as lower than expected interest rates and growth in existing home prices continue to fuel demand, sustaining year to date growth in applications of more than 7 percent compared to 2016," said Lynn Fisher, VP of Research and Economics at MBA.
Breaking down mortgage applications to loan type, 71.9 percent of all August applications were conventional loans, whereas 14.4 percent were Federal Housing Administration (FHA) loans, and VA loans comprised 12.7 percent of the loans, and RHS/UDSA loans only amounted to 0.9 percent.
The MBA, through seasonally adjusted data, estimates that there were 665,000 new single-home sales during August, which is an increase of 16.2 percent from July’s figure of 562,000. Unadjusted, those numbers are 52,000 in August, a 6.1 percent increase from 49,000 in July.