Mortgage application numbers have risen on a yearly basis as rates dropped, with the Federal Reserve expected to announce an interest rate cut on Wednesday.
August data from the MBA showed that applications for new home purchases increased by 4.4 percent from 2023 and retained momentum by not lowering from the prior month.
"Homebuyers, including a growing share of first-time buyers, continue to favor newly built homes, as declining mortgage rates in August contributed to the uptick in new home sales activity," Kan said. "The [Federal Housing Administration] share of purchase applications reached another record high in the survey at 29.6 percent. Estimated new home sales increased almost 15 percent over the month, reaching the fastest sales pace since February 2022."
According to the U.S. Census report published last month, sales of new single-family houses in July 2024 were at a seasonally adjusted annual rate of 739,000, a 10 percent jump from June numbers, and higher than the prior month.
More properties on the market indicate a decline in home prices, and combined with lower rates ensure citizens have access to homeownership.
The median sales price of new houses sold in July 2024 was $429,800, according to the Census report.
"U.S. home prices grew 0.5 percent in August on a seasonally adjusted basis, the largest month-over-month increase since April," Redfin said in a statement.
Redfin Senior Economist Sheharyar Bokhari said supply remains "stubbornly low" and that if mortgage rates fall further, as expected, "price growth will likely pick up as more prospective homebuyers come off the sidelines."
Potential homebuyers are among those awaiting Wednesday's Fed report on rate cuts.
"The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks," he said.
Some estimates are counting on a 25 basis points cut, while there is increasing discussion of a larger 50 basis points cut.
The nation's inflation rate slowed to 2.5 percent in August, the lowest since February 2021, showcasing a consecutive monthly decrease since March.
Mortgage credit availability also increased in August. An index measuring credit has indicated a loosening of lending standards, according to the MBA.
"Credit availability increased in August, with the conventional credit index reaching its highest level since July 2022," Kan said.
The related index showed an uptick this month from prior months, when it was in decline. Current sales conditions and future expectations were all shown to have increased.