Mortgage Applications for New-Home Purchases Down Month-Over-Month but Up Year-Over-Year in December

The Mortgage Bankers Association (MBA) reported on Thursday (1-18-24) that data from its December 2023 Builder Application Survey reveals mortgage applications for new home purchases decreased 4.0% month-over-month but were up 22.2% year-over-year. This change does not include any adjustments for typical seasonal patterns.

According to MBA, the seasonally adjusted estimate for December declined 11.5% from November’s pace of 677,000 units. On an unadjusted basis, MBA estimates there were 46,000 new home sales in December, a decrease of 6.1% from 49,000 new home sales in November.

By loan product type, conventional loans comprised 64.5% of loan applications in December; FHA loans comprised 25.1%; RHS/USDA loans comprised 0.5%, and VA comprised loans 9.9%. The average loan size for a new home increased from $390,049 in November to $405,368 in December.

Adding additional background to the survey results, MBA Vice President and Deputy Chief Economist Joel Kan said,

“The low level of existing homes for sale continues to divert prospective buyers to newly built homes. Mortgage applications for new homes showed a 22% annual gain in December—the 11th consecutive year-over-year increase in applications. Compared to November, applications were down 4% on a non-seasonally adjusted basis, consistent with December declines for the past two years.”