MBA: January New Home Purchase Mortgage Applications Increased 19.1% YoY
The Mortgage Bankers Association’s Builder Application Survey for January 2024 shows mortgage applications for new home purchases increased 19.1% compared to a year ago.
Compared to December 2023, applications increased by 38%. This change does not include any adjustment for typical seasonal patterns.
“Applications for new home purchases were strong in January, as newly built homes remained an attractive option for prospective homebuyers who looked to take advantage of lower mortgage rates during the month,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Applications were up 19% from a year ago – the twelfth consecutive annual increase – and the non-seasonally adjusted index was the strongest January reading in the survey’s history. The seasonally adjusted annualized sales pace of new home sales was 700,000 units, the highest sales pace since October 2023.”
MBA estimates new single-family home sales, which has consistently been a leading indicator of the U.S. Census Bureau’s New Residential Sales report, is that new single-family home sales were running at a seasonally adjusted annual rate of 700,000 units in January 2024. 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 seasonally adjusted estimate for January is a increase of 16.9% from the December pace of 599,000 units. On an unadjusted basis, MBA estimates that there were 63,000 new home sales in January 2024, an increase of 37% from 46,000 new home sales in December.
By product type, conventional loans composed 64.5 percent of loan applications, FHA loans composed 24.8%, RHS/USDA loans composed 0.4% and VA loans composed 10.3%. The average loan size for new homes decreased from $405,368 in December to $401,282 in January.
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 MBA’s Builder Applications Survey, please click here.
