April New Home Purchase Mortgage Applications Up 31% From Year Ago
The Mortgage Bankers Association’s monthly Builder Applications Survey posted strong annual gains in April, as the spring homebuying season shifted into full gear.
BAS data for April show mortgage applications for new home purchases decreased by 9 percent from March but improved by 30.8 percent from a year ago. (Changes do not include any adjustment for typical seasonal patterns.)
By product type, conventional loans composed 72.9 percent of loan applications, FHA loans composed 15.8 percent, RHS/USDA loans composed 1.0 percent and VA loans composed 10.3 percent. The average loan size of new homes increased from $374,353 in March to $377,434 in April.
“Purchase applications for new homes, unadjusted for typical seasonal patterns, declined in April, but the average loan size increased to its highest level in MBA’s survey,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “The purchase market remains strong overall, but low housing inventory and accelerating home prices have started to adversely impact purchase activity. Additionally, homebuilders have reported significantly higher input prices, which is contributing to the ongoing rise in sales prices and average loan sizes.”
MBA estimated new single-family home sales at a seasonally adjusted annual rate of 770,000 units in April an increase of 7.8 percent from the March pace of 714,000 units. On an unadjusted basis, MBA estimated 72,000 new home sales in April 2021, unchanged from March. “While still strong, this sales pace remains below the 877,000-sales pace seen in the second half of 2020,” Kan said.
The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.
MBA’s Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country. Utilizing this data, as well as data from other sources, MBA is able to provide an early estimate of new home sales volumes at the national, state, and metro level. This data also provides information regarding the types of loans used by new home buyers. Official new home sales estimates are conducted by the Census Bureau on a monthly basis. In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.
For additional information on the MBA Builder Applications Survey, click here.