Mortgage applications for new home purchases in US down 16% in June

Mortgage applications for new home purchases in the US declined 16% in June, compared to May, according to a Mortgage Bankers Association (MBA) report released Thursday.

"Applications for new home purchases slowed in June, consistent with broader declines in single-family construction and new building permits as well as typical seasonal patterns," MBA Vice President and Deputy Chief Economist Joel Kan said in the report. "The average loan size edged lower for the second consecutive month."

The MBA said it estimates new home sales saw a monthly decline to 626,000 units in June, marking the slowest in four months. The seasonally adjusted estimate for June is a decrease of 10.8% from 702,000 units in May.

"Mortgage rates dipped below 7 percent in June but that did little to spur purchase activity," Kan noted.

The average contract interest rate for 30-year fixed-rate mortgages fell to 6.87% for the week ending July 12, from 7% the previous week, and marked the lowest since March, according to MBA figures released Wednesday.

Mortgage applications for new home purchases were up 0.7% in June, compared to the same month last year, it said.