Mortgage demand slips as Southern Security expands.
New-home mortgage applications fell for a fifth straight month in August, even as the Tennessee credit union adds a 12-person team and three offices to its mortgage business.
Mortgage demand for newly built homes weakened again in August, with applications falling to their lowest level of the year as higher rates weighed on buyers. Against that backdrop, Southern Security Credit Union is expanding its mortgage operation across Tennessee and Mississippi, betting on local expertise even as the broader market slows.
Mortgage applications for new-home purchases fell 5.5% from a year earlier and 6% from July, according to the Mortgage Bankers Association’s August Builder Application Survey. The decline was not adjusted for seasonal patterns.
“Increasing mortgage rates continue to put pressure on new home sales activity,” said Joel Kan, MBA’s vice president and deputy chief economist. Applications declined for the fifth consecutive month, he said.
MBA estimated that new single-family home sales were running at a seasonally adjusted annual rate of 664,000 units in August, up 2.6% from July’s 647,000. But the estimate remained 9% below the year-earlier pace.
The average loan size for a new home also edged lower, falling to $373,194 in August from $374,438 in July.
Loan mix reflected the pressure on buyers. Conventional loans accounted for 49.5% of applications, while FHA loans made up 35%, the highest FHA share in three months. VA loans represented 13.9%, and RHS/USDA loans accounted for 1.7%.
The MBA data provides an early read on new-home sales because mortgage applications generally coincide with contract signing.
Southern Security, meanwhile, is moving to expand its ability to originate mortgages. The $252 million-asset credit union, based in Collierville, has added an established 12-person mortgage team and three dedicated offices in Collierville, Jackson and Tupelo.
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The team brings more than 180 years of combined mortgage experience and will be led by Jayme Boyle, Southern Security’s director of mortgage. The new operation will serve borrowers across Tennessee and Mississippi, with members also able to begin a mortgage request through any Southern Security branch.
The three dedicated offices are located in Collierville and Jackson, Tenn., and Tupelo, Miss. Boyle and the incoming team bring existing relationships with homebuyers, real estate professionals, builders and community partners in the region.
“Mortgage lending is built on expertise, responsiveness, and trust, and this team brings a strong record in all three areas,” said Dawn Graeter, Southern Security’s president and chief executive. She said the expansion would increase the credit union’s mortgage capacity while preserving its community-focused approach.
The credit union offers financing for home purchases, construction and refinancing, including conventional, FHA and VA loans and first-time homebuyer programs.
For Southern Security, the expansion comes as prospective buyers face a market in which mortgage rates are making affordability more difficult. The MBA said the higher-rate environment is contributing to the decline in applications for newly constructed homes.
The credit union’s mortgage operation will compete for borrowers not only on product availability, but on the local relationships its new team already has in the Mid-South.
“Our team has built strong relationships while helping people across the Mid-South achieve homeownership,” Boyle said. “Joining Southern Security gives us an opportunity to build on that experience as part of a member-owned financial institution with deep roots in the communities we serve.”
Southern Security serves more than 23,000 members and more than 500 partner organizations. It earned $217,000 in the first six months of 2026, down from $650,000 in the year-ago period, according to NCUA call report data.
The contrast between the national housing data and Southern Security’s strategy is notable. New-home mortgage applications have been falling for months, but the credit union is increasing its capacity and adding dedicated offices in markets where it sees an opportunity to build relationships with borrowers.
For now, the housing market is sending a mixed message: fewer applications and pressure from higher rates, alongside financial institutions preparing to compete for the borrowers who remain ready to buy, build or refinance.
“Increasing mortgage rates continue to put pressure on new home sales activity.”
– Joel Kan
VP & Deputy Chief Economist
Mortgage Bankers Association
Ken McCarthy is manager of marketing communications at Tyfone, where he monitors the credit union industry and contributes to conversations shaping its future. He previously covered credit unions and community banking for American Banker and S&P Global Market Intelligence. He holds a journalism degree from Point Park University and has more than 15 years of experience covering financial services. He is also the author of three literary fiction novels.
