For the fourth month in a row, mortgage applications for new home purchases have declined.
According to a new report from the Mortgage Bankers Association, mortgage applications for new home purchases fell in July.
This marks the fourth straight month that new home applications have declined, signaling that demand for new homes is weakening.
Per the report, new home applications declined by 4% in July compared to June.
The decline is much more significant when comparing this year to last year. According to the MBA report, mortgage applications for new home purchases were down by 27.4% from July 2020 to July 2021.
However, July’s results look a little better when digging a little deeper.
"Mortgage applications for new home purchases declined in July - as is typical most summers when home sales start to moderate - but did come in at the second-strongest July reading since the inception of MBA's survey in 2012,” Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting, said.
According to Kan, the price of new homes continues rising, which drove the average loan size for a new home purchase application to a new record of $402,440.
"Homebuilders are still facing elevated building costs and accelerating home-price growth from the continued imbalance between supply and demand,” Kan said.