November New Home Purchase Mortgage Applications Down 11%

Mortgage Bankers Association Builder Applications Survey data for November show mortgage applications for new home purchases decreased by 14 percent from October and by 11 percent from a year ago.  

By product type, conventional loans composed 69.7 percent of loan applications, FHA loans composed 17.3 percent, RHS/USDA loans composed 0.7 percent and VA loans composed 12.3 percent. The average loan size of new homes decreased from $331,732 in October to $326,037 in November.  

Changes do not include any adjustment for typical seasonal patterns.  

“New home sales fell almost 7 percent in November and were about 5 percent lower than a year ago,” said MBA Associate Vice President of Economic and Industry Forecasting Joel Kan. “Despite a still-strong job market and recent declines in mortgage rates, affordability challenges continue to hold back sales activity, as wage growth still lags behind home-price growth. Additionally, recent stock market volatility and some economic uncertainty likely also contributed to the pullback in home sales in November.”  

MBA estimated new single-family home sales at a seasonally adjusted annual rate of 627,000 units in November, a decrease of 6.8 percent from October (673,000 units). On an unadjusted basis, MBA estimated 45,000 new home sales in November, a decrease of 15.1 percent from 53,000 new home sales in October.   

The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.  

The MBA Builder Applications Survey tracks application volume from mortgage subsidiaries of home builders across the country. Using these data, as well as data from other sources, MBA provides an early estimate of new home sales volumes at the national, state and metro level. These data also provide information regarding types of loans used by new home buyers. Official new home sales estimates are conducted by the Census Bureau on a monthly basis. In those data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.  

For additional information on MBA’s Builder Applications Survey, click https://www.mba.org/news-research-and-resources/research-and-economics/single-family-research/builder-applications-survey.