“The 10-year Treasury yield continues to hover along the same narrow range, as increased global trade tensions are causing investors to take a cautious approach,” said Sam Khater, Freddie Mac’s Chief Economist. “This, in turn, has kept borrowing costs at bay, which is certainly welcoming news for those looking to buy a home before the summer ends. A record number of people quit their job last month, most likely for a new opportunity with higher wages and better benefits. This positive trend, along with these lower mortgage rates, should increasingly give some previously priced-out prospective homebuyers the financial wherewithal to resume their home search.”
The average loan size of new homes decreased from $337,515 in May to $333,033 in June. By product type, conventional loans dominated the with a 71.3 percent share of loan applications, followed by FHA loans at 15.9 percent, VA loans at 11.6 percent and RHS/USDA loans at 1.1 percent.
For the year-to-date, the MBA noted that new home applications are up 2.5 percent compared to the same period in 2017.
“Our sense is that builders remain constrained by the tight job market for construction labor and rising input costs, particularly lumber costs,” said Mike Fratantoni, MBA Chief Economist and Senior Vice President of Research and Industry Technology.