January Builder Applications Up from December; Down from Year Ago
Mortgage applications for new home purchases rose in January from a month ago but fell year over year, the Mortgage Bankers Association reported Friday.
The MBA Builder Application Survey reported mortgage applications for new home purchases 10 percent in January from December, but fell by 12.5 percent from a year ago (Changes do not include any adjustment for typical seasonal patterns).
By product type, conventional loans composed 77.0 percent of loan applications; FHA loans composed 13.0 percent; RHS/USDA loans composed 0.5 percent; and VA loans composed 9.5 percent. The average loan size of new homes increased from $423,102 in December to $426,954 in January.
“Purchase applications for new homes fell on an annual basis in January, but the 10 percent monthly gain is a positive sign to start the year,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “While homebuyer demand remains strong, purchase activity is being constrained by higher prices and building delays due to supply-chain pressures and building materials shortages.”
MBA estimated new single-family home sales at a seasonally adjusted annual rate of 821,000 units in January—the slowest annual pace since last July, based on data from the BAS, a decrease of 7.4 percent from the December pace of 887,000 units. On an unadjusted basis, MBA estimated 66,000 new home sales in January, an increase of 10 percent from 60,000 new home sales in December.
“Purchase activity for new homes continues to be concentrated in higher end of the market and overall sales prices continue to increase, as evidenced by another record-setting month for the average loan size at $427,000,” 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.
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 the MBA Builder Applications Survey, click here.
