Purchase applications increase, defying economic uncertainty

“Ongoing volatility in mortgage rates in the months ahead may lead to larger swings than is typical in the pace of new home sales,” Kan said. “Between moderating sales prices and volatile mortgage rates, buyers seem to be biding their time.”

Read more: Another down week for mortgage demand

Based on government data, MBA estimates that new single-family home sales rose 18.3% to a seasonally adjusted annual rate of 699,000 units in August, up from the July pace of 591,000 units. Unadjusted, there were approximately 58,000 new home sales in August, up 16% from 50,000 new home sales in July.

Kan said the monthly increase is the strongest pace since May 2022. “The current sales pace is still 23% lower than the November 2021 peak and is down 20% from last year.”

By product type, conventional loans composed 72.1% of loan applications, FHA loans composed 17%, RHS/USDA loans composed 0.2% and VA loans composed 10.7%.