MBA Builder Apps Survey Shows Monthly, Yearly Declines

Mortgage applications for new home purchases in April fell by 14 percent from March and by 10.6 percent from a year ago, the Mortgage Bankers Association reported Thursday.

The MBA Builder Applications Survey also reported by product type, conventional loans composed 76.7 percent of loan applications, FHA loans composed 13.1 percent, RHS/USDA loans composed 0.2 percent and VA loans composed 10.1 percent. The average loan size of new homes increased from $436,151 in March to a survey-high $436,576 in April.

“The spike in mortgage rates cooled demand and homebuilders continued to grapple with rising costs, supply-chain issues and extended completion timelines,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “With the supply of existing homes on the market still at extremely low levels, the new home market is an important source of housing supply. However, the pace of construction has slowed in recent months.”

Kan noted as home prices increased, more than half of applications were for loan amounts greater than $400,000. “Higher rates and sales prices and larger loan sizes are eroding housing affordability and pricing some buyers out of the market,” he said.

MBA estimated new single-family home sales at a seasonally adjusted annual rate of 701,000 units in April, a decrease of 6.8 percent from the March pace of 752,000 units and the fifth consecutive monthly decline to the slowest pace since May 2020. On an unadjusted basis, MBA estimated 65,000 new home sales in April, a decrease of 12.2 percent from 74,000 new home sales in March. 

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.