Mortgage Applications for New-Home Purchases Decrease 6.0% in September

On Thursday, the Mortgage Bankers Association (MBA) reported that data from its Builder Application Survey (BAS) reveals that mortgage applications for new-home purchases decreased 6.0% in September but remained 10.8% higher year-over-year. This change does not include any adjustments for typical seasonal patterns.

MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 680,000 units in September, a decrease of 12.4% from the August pace of 776,000 units. On an unadjusted basis, MBA estimates that there were 54,000 new-home sales in September, a decrease of 10% from 60,000 in August.

By loan product type, conventional loans composed 31.2% of loan applications in September; FHA loans comprised 28.7%; RHS/USDA loans comprised 0.4%; and VA loans comprised 9.6%. The average loan size for a new home increased from $395,935 in August to $402,658 in September.

Adding background and analysis to the report, MBA Vice President and Deputy Chief Economist Joel Kan said:

“Applications for new-home purchases declined in September, consistent with seasonal patterns, and continued to run ahead of last year’s pace. New-home sales continue to be an appealing option for prospective homebuyers as mortgage rates were lower during the month and more newly built options have been coming onto the market. The FHA share of applications was elevated to almost 29%, a sign that first-time buyers are active.”