Mortgage applications for the purchase of newly built homes took a beating in September as high interest rates weighed on homebuying plans.

Loans for new-home purchases fell 8.3% from a year ago and an even 8% from August, the Mortgage Bankers Association reported Thursday.

“MBA’s estimate of new home sales at 584,000 units was the weakest sales pace since April 2020,” Joel Kan, the association’s deputy chief economist, said in a press release. “The FHA [Federal Housing Administration] share of applications decreased, and the average loan size increased, as higher mortgage rates had a greater impact on first-time homebuyers’ purchase decisions.”

The MBA estimates that new single-family homes sold at a seasonally adjusted annual rate of 584,000 units in September. That would put the pace 12% below August’s tally.

Broken down by product type, conventional loans accounted for about 50% of applications. FHA loans garnered just over one-third of the mix, while mortgages backed by the Department of Veterans Affairs finished with a 14.1% share last month.

The average loan size for new homes ticked up to $374,724 last month compared to $373,194 in August, the MBA reported.

September was a challenging month for mortgage rates. After averaging 6.67% in August, the 30-year fixed-rate mortgage averaged 6.86% in September, according to Freddie Mac data. It has since soared well past 7%.

“The increase in mortgage rates in September had a chilling effect for new home purchase activity,” Kan said.