Mortgage applications for new home purchases in November increased 3.1% from one year earlier, according to data from the Mortgage Bankers Association (MBA). Compared to October, applications decreased by 7%.
MBA estimated new single-family home sales were running at a seasonally adjusted annual rate of 755,000 units in November, down by 2.1% from the October pace of 771,000 units. On an unadjusted basis, MBA estimated that there were 51,000 new home sales in November, a decrease of 7.3% from 55,000 new home sales in October.
The average loan size for new homes decreased from $381,404 in October to $378,063 in November. By product type, conventional loans composed 49.5% of loan applications, FHA loans accounted for 37.1%, VA loans captured a 12.7% share, and RHS/USDA loans composed 0.7%.
“While the arrival date of official data from the Census Bureau on the pace of new home sales remains ‘TBD,’ according to the Census website, MBA’s Builder Application Survey data show that new home purchase activity was up 3 percent on an annual basis in November, and down 7% from the prior month,” said Mike Fratantoni, MBA’s senior vice president and chief economist. “Mortgage rates have remained in a narrow range, and inventories of both new and existing homes on the market have increased. Potential buyers have more homes to choose from, and this removal of supply constraints is leading to a stronger sales pace. New homebuyers continue to look for ways to extend their purchasing power or lower monthly payments, with 37% of new homebuyers using a mortgage choosing an FHA loan, and 24% choosing an ARM loan.”
