MBA: November New Home Purchase Mortgage Applications Fall by 16% Monthly; Up Nearly 35% from Year Ago
The Mortgage Bankers Association’s Builder Application Survey data for November show mortgage applications for new home purchases fell by 16 percent from October but jumped by 34.7 percent from a year ago.
The changes do not include any adjustment for typical seasonal patterns. By product type, conventional loans composed 71.8 percent of loan applications, FHA loans composed 16.8 percent, RHS/USDA loans composed 0.9 percent and VA loans composed 10.4 percent. The average loan size of new homes increased from $355,684 in October to $357,554 in November.
“November new home sales activity, both mortgage applications and home sales, ran at a pace considerably ahead of 2019, showing the ongoing strong growth in housing demand and new residential construction,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “However, MBA estimates that after climbing to a new survey high in October, the seasonally adjusted pace of new home sales declined in November. Signs of a slowdown in the economic recovery likely contributed to the expected monthly decrease in activity.”
MBA estimated new single-family home sales at a seasonally adjusted annual rate of 827,000 units in November, based on data from the BAS, a decrease of 10.8 percent from the October pace of 927,000 units. On an unadjusted basis, MBA estimated 59,000 new home sales in November, a decrease of 15.7 percent from 70,000 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 Application 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.