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

The Mortgage Bankers Association (MBA) reported on Tuesday (12-19-23) that data from its November Builder Application Survey reveals that mortgage applications for new-home purchases decreased 12.0% month-over-month but were up 21.8% 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 677,000 units in November, a 5.3% decline from October’s pace of 715,000 units. On an unadjusted basis, MBA estimates that there were 49,000 new-home sales, a decrease of 10.9% from 55,000 in October.

By loan product type, conventional loans comprised 62.8% of loan applications in November; FHA loans 27.7%; RHS/USDA loans 0.3%; and VA loans 9.7%. The average loan size for a new home decreased from $390,225 in October to $390,049 in November.

Commenting on the results of the November Builder Application Survey, MBA Senior Vice President and Chief Economist Mike Fratantoni said:

“Lending on new construction has been the one bright spot in an otherwise slow year for purchase originations. That trend continued in November, with applications to purchase a new home up 22% compared to last year, while the purchase market as a whole remains about 20% behind last year’s pace. It is also interesting to see that a growing portion of this demand for new homes is being financed by FHA loans. This is a sign that first-time buyers remain a strong force in this market. We are forecasting that lower rates should help to keep this demand strong as we enter the spring homebuying season.”