New home purchase applications slip in July
“Purchase activity for newly built homes slowed in July, with both applications to purchase and the estimated number of new home sales falling behind last year’s pace,” said Joel Kan, CMB, MBA’s Vice President and Deputy Chief Economist.
“With new-home inventory still elevated, weaker demand likely reflects increased homebuyer sensitivity to higher mortgage rates. The annualized sales pace decreased for the third time in four months and at 647,000 units, fell below the average sales pace of 664,000 units during the first six months of the year.”
The July figures arrive at a complicated moment for the new-home segment. Builders have spent recent months discounting aggressively and offering rate buydowns and incentives to sustain traffic, yet those tools appear to be losing some of their pull as would-be buyers reassess affordability.
FHA share rises as buyers stretch for access
The loan product breakdown reinforces the affordability pressure. FHA loans composed 34.6% of new-home applications in July — a proportion that underscores how many buyers entering the new-construction market are doing so through government-backed financing, with limited down payment capacity.
Conventional loans held a 50.0% share, VA loans accounted for 13.6%, and RHS/USDA loans made up the remaining 1.8%.
