Mortgage applications for new home purchases during February were down by 6.9% year-over-year, although they were also up by 0.3% from January, according to data from the Mortgage Bankers Association (MBA).
By product type, conventional loans composed 56.7% of loan applications while FHA loans accounted for 32.1%, VA loans encompassed 10.6% and RHS/USDA loans were 0.6% The average loan size for new homes decreased from $403,416 in January to $397,516 in February.
The MBA estimated new single-family home sales were at a seasonally adjusted annual rate of 634,000 units in February, up 2.9% from January’s 616,000 units. On an unadjusted basis, the MBA estimated there were 57,000 new home sales in February, up 1.8% from 56,000 new home sales in January.
“New home purchase activity strengthened in February, in line with seasonal patterns, as higher housing inventory and declining rates supported growth,” said Joel Kan, MBA’s vice president and deputy chief economist. “However, applications to purchase newly built homes were lower than a year ago for the second straight month. The FHA share of applications reached its highest share in the survey, accounting for almost a third of applications. The average loan size declined, indicating that first-time homebuyers remain active in the new home purchase market. MBA’s estimate of seasonally adjusted new home sales increased for the second consecutive month to its highest pace in three months.”
