December New Home Purchase Mortgage Applications Dip But Finish Year Strong

The Mortgage Bankers Association this morning said mortgage applications for new home purchases in December fell by 5 percent from November but improved by nearly 39 percent from a year ago.

The MBA Builder Applications Survey reported by product type, conventional loans composed 68.7 percent of loan applications, FHA loans composed 18.4 percent, RHS/USDA loans composed 0.8 percent and VA loans composed 12.1 percent. The average loan size of new homes increased from $337,943 in November to $338,625 in December. Changes do not include adjustment for typical seasonal patterns.

“The sizeable year-over-year increase in new home purchase activity in December capped off what was a strong 2019 overall,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “The housing market is seeing signs of a more significant recovery in new residential construction, which is a promising sign for prospective homebuyers. Even though supply continues to lag, we expect to see another year of gradual growth in new home sales, supported by rising household formation and the healthy job market.”

MBA estimated new single-family home sales at a seasonally adjusted annual rate of 689,000 units in December, an increase of 0.1 percent from the November pace of 688,000 units. On an unadjusted basis, MBA estimated 48,000 new home sales in December, a decrease of 5.9 percent from 51,000 new home sales in November.

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