MBA: January New Home Purchase Apps Surge Month over Month, Year over Year

Mortgage applications for new home purchases started the new year on a strong note, posting solid increases from both a month ago and a year ago, the Mortgage Bankers Association reported this morning.

MBA Builder Applications Survey data for January reported mortgage applications for new home purchases increased by 40 percent from December and by 35.3 percent from a year ago. This change does not include any adjustment for typical seasonal patterns.

By product type, conventional loans composed 69.5 percent of loan applications, FHA loans composed 17.8 percent, RHS/USDA loans composed 0.8 percent and VA loans composed 12 percent. The average loan size of new homes increased from $338,625 in December to $346,140 in January.

“New home applications and sales activity surged in January. This was a continuation of the end of 2019, which saw strong residential construction and increased purchase applications activity,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Even with some global and domestic economic uncertainty, builders have ramped up production in recent months to meet increased homebuyer demand.”

MBA estimated new single-family home sales at a seasonally adjusted annual rate of 865,000 units in January, a record pace, based on data from the BAS. The seasonally adjusted estimate for January represents an increase of 25.5 percent from the December pace of 689,000 units.  On an unadjusted basis, MBA estimated 66,000 new home sales in January, an increase of 37.5 percent from 48,000 new home sales in December. 

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