For August, new-home purchase applications jumped 20.6% compared with one year ago, according to the latest Mortgage Bankers Association (MBA) Builder Application Survey (BAS). Month over month, applications increased by 4%. The change does not include any adjustment for typical seasonal patterns.

“There was strong purchase demand in August for newly constructed homes, as existing for-sale inventory remains low with most homeowners locked into lower mortgage rates and unwilling to give those rates up in this higher rate market,” says Joel Kan, MBA’s vice president and deputy chief economist. “Despite the 30-year fixed rate averaging over 7% in August, applications for new-home purchase loans increased over the month and from a year ago.”

MBA estimates new single-family home sales—which has consistently been a leading indicator of the U.S. Census Bureau’s New Residential Sales report—were running at a seasonally adjusted annual rate of 702,000 units in August. The new-home sales estimate is derived using mortgage application information from the BAS and assumptions regarding market coverage and other factors.

For August, the seasonally adjusted estimate is an increase of 3.7% from the July pace of 677,000 units. On an unadjusted basis, MBA estimates that there were 59,000 new-home sales in August, an increase of 5.4% from 56,000 new-home sales the month prior.

“The FHA share of applications dipped slightly in August but remains close to survey highs, indicating that a larger share of first-time home buyers is supporting the new-home sales market,” says Kan.

Conventional loans composed 65.8% of loan applications; FHA loans composed 23.8%; RHS/USDA loans composed 0.2%; and VA loans composed 10.2%. In August, the average loan size for new homes increased from $397,148 in July to $398,092.