Mortgage Applications for New Home Purchases Declined Month-Over-Month in April

The Mortgage Bankers Association (MBA) is reporting that data from its April Builder Application Survey (BAS) reveals mortgage applications for new home purchases decreased 11% month-over-month but were up 4.1% year-over-year. This change does not include any adjustments for typical seasonal patterns.

According to the MBA, the seasonally adjusted estimate for April decreased 2.6% from March’s pace of 666,000 units. On an unadjusted basis, the MBA estimates that there were 58,000 new home sales in April, a decrease of 10.8% from 65,000 new home sales reported in March.

Adding additional background and his analysis to the survey, MBA’s Vice President and Deputy Chief Economist Joel Kan said:

“Purchase applications for newly constructed homes declined in April but were up 4% compared to a year ago. This was the third straight month of year-over-year growth in applications, which signals improving housing demand for newly built homes at a time when the broader market is leaning more on new construction to boost for-sale inventory levels. Mortgage rates have settled in the 6.5% range lately and remain over a percentage point higher than last year. The higher mortgage rate environment continues to factor into homebuying and selling decisions.

Since the brief pick-up in new home sales in January when mortgage rates dipped, the pace of new home sales has declined for three consecutive months. With the recently released Census data showing single-family permitting activity on the upswing and housing starts also rising, we expect that to translate to growth in new home sales activity in the second half of the year.”