“Mortgage applications for new home purchases declined in July but did come in at the second-strongest July reading since the inception of MBA’s survey in 2012,” he said. “Furthermore, the average loan size again increased to a new record of $402,440. Homebuilders are still facing elevated building costs and accelerating home-price growth from the continued imbalance between supply and demand.”

Read more: Home purchase sentiment continues to turn sour

MBA estimates new single-family home sales were running at a seasonally adjusted annual pace of 779,000 units in July, up 10.7% from the June rate of 704,000 units. Unadjusted, there were 64,000 new home sales in July, a 3% drop from 66,000 new home sales in June.

“After adjusting for seasonal patterns, our estimate of annualized new home sales showed a jump of more than 10% from June,” Kan said. “The housing market is still extremely competitive, and prospective buyers have increasingly turned to newly built homes because for-sale inventories remain so low.”

By product type, conventional loans composed 73.8% of loan applications, FHA loans composed 14.6%, RHS/USDA loans composed 0.8%, and VA loans composed 10.8%. The average loan size of new homes increased from $392,370 in June to $402,440 in July.