Demand for mortgage loans is on the rise as delinquencies and foreclosures continue to decline, according to two recent surveys from the Mortgage Bankers Association.

Mortgage applications for new homes climbed 14% in July, according to the Builder Application Survey released by the MBA on Friday.

The average loan size for new homes increased 2% from the previous month, rising to $288,382.

Conventional loans made up 66.5% of loan applications. Federal Housing Administration loans and Veterans Affairs loans rounded out the pool at 17.7% and 14.5%, respectively. Rural Housing Service/USDA loans made up just 1.3% of applications.

Meanwhile, foreclosures and delinquent loans fell in the second quarter. Just 5.9% of mortgages on one-to-four-unit homes were more than 90 days past due or in foreclosure at the end of June, compared with 7.3% a year ago. That's the lowest rate since mid-2008, according to the MBA's National Delinquency Survey released Thursday.

"For most of the country, delinquencies and foreclosures have returned to more normal historical levels," the MBA's chief economist, Jay Brinkmann, said in a press release. "Most states are at or only slightly above longer-term averages, and some of the worst-hit states are showing improvement."

However, the improvements varied from state to state, Brinkmann added. "States with a judicial foreclosure system continue to bear a disproportionate share of the foreclosure backlog," he said. Foreclosure rates increased in New York, New Jersey, and Connecticut, all of which require court approval before lenders can seize property.

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