Mortgage Applications for New Home Purchases Drop -9% between January and February 2021

The latest Builder Application Survey (BAS) from the Mortgage Bankers Association (MBA) for February 2021 shows mortgage applications for new home purchases increased 9.2% year-over-year (February 2020 – February 2021). However, when compared to January 2021, applications decreased by -9%. This change does not include any adjustment for typical seasonal patterns. MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 748,000 units in February 2021, based on data from the BAS. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors. The seasonally adjusted estimate for February is a decrease of -17.3% from the January pace of 905,000 units. On an unadjusted basis, MBA estimates that there were 65,000 new home sales in February 2021, a decrease of -5.8% from 69,000 new home sales in January. In prepared remarks for the release of the report Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting said, “Applications for new home purchase mortgages decreased last month but remained over 9 percent higher than a year ago, and MBA’s estimate of new home sales, at 748,000 units, was at its slowest annual pace since May 2020. After seven consecutive months of a strong 800,000-plus-unit sales pace, supply and demand imbalances are likely creating bottlenecks.”