Declines Reported In New Home Sales, Mortgage Application Activity

The latest housing market statistics showed a drop in home sales last month and a lower level of mortgage application activity last week.

Sales of new single‐family houses in June were at a seasonally adjusted annual rate of 697,000, according to estimates published by the U.S. Census Bureau and the Department of Housing and Urban Development. This is a 2.5% drop from the revised May rate of 715,000, but it is also 23.8% above the June 2022 estimate of 563,000.

The median sales price of new houses sold in June 2023 was $415,400 while the average sales price was $494,700. The seasonally‐adjusted estimate of new houses for sale at the end of June was 432,000, which represents a supply of 7.4 months at the current sales rate

Separately, the Mortgage Bankers Association’s (MBA) Market Composite Index for the week ending July 21 was down by 1.8% on a seasonally adjusted basis from the previous week and down 1.5% on an unadjusted basis. The seasonally adjusted Purchase Index was 3% lower while the unadjusted index fell 2% from the prior week and was 23% below the level from the same week one year ago.

The Refinance Index dipped by 0.4% from the previous week and was down 30% from the same week one year ago. The refinance share of mortgage activity increased to 28.7% of total applications from 28.4% the previous week.

The FHA share of total applications decreased to 12.7% from 13.6% the week prior while VA and USDA shares of total applications remained unchanged at 12.1% and 0.5%, respectively. Joel Kan, MBA’s vice president, and deputy chief economist, blamed the FHA’s activity for the week’s enervation.

“The 2.5% decline in purchase activity, partly driven by a 10% decrease in FHA applications, pushed the purchase index to its lowest level in over a month,” said Kan. “The decrease in FHA purchase applications contributed to an increase in the overall average purchase loan size to $432,700, its highest level since the end of this May.”