August New-Home Mortgage Applications Hit 2026 Low

New-home mortgage applications fell to the lowest level recorded in 2026 during August. The Mortgage Bankers Association reported a 5.5% decline compared to the same period last year. Applications also dropped 6% from July without seasonal adjustment.

This marks the fifth consecutive month of year-over-year declines. Rising borrowing costs have kept potential buyers on the sidelines. The trend highlights sustained pressure on new-construction demand across the United States.

Rates climb to fourteen-month high

The average 30-year fixed-rate mortgage reached 6.76% for the week ending September 10. This is the highest level in more than 14 months. Ten-year Treasury yields have also surged to their highest point since 2007.

Market expectations for a Federal Reserve rate hike are rising. August core CPI rose 0.3%, exceeding economist forecasts. These data points arrived just days before the Fed's September 15-16 policy meeting.

FHA loans capture three-month high share

Federal Housing Administration loans accounted for 35.0% of August applications. This is the highest share in three months. Buyers are increasingly relying on government-backed programs to offset higher costs.

Conventional loans made up 49.5% of total applications. VA loans represented 13.9% and RHS/USDA loans 1.7%. The average new-home loan size decreased slightly to $373,194 from $374,438 in July.

Sales estimates show mixed signals

MBA estimates new single-family home sales ran at a seasonally adjusted annual rate of 664,000 units in August. This is up 2.6% from July's pace of 647,000 units. However, the figure remains roughly 9% below last year's rate.

Unadjusted estimates show 52,000 new home sales in August, down 3.7% from July. GN auto markets/housing: mortgage rates data confirms the market remains subdued. The MBA projects rates will stay between 6.1% and 6.3% through year-end.