Mortgage Applications for New Home Purchases Move Higher in April

On Tuesday, the Mortgage Bankers Association (MBA) reported that data from its April Builder Application Survey (BAS) reveals mortgage applications for new-home purchases increased 22.1% month-over-month and increased 2.0% 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 699,000 units in April—a 13.7% increase from March’s pace of 615,000 units. On an unadjusted basis, MBA estimates that there were 62,000 new-home sales, a 3.3% increase from 60,000 in March.

By loan product type, conventional loans comprised 62.8% of loan applications in April; FHA loans comprised 26.3%; RHS/USDA loans comprised 0.3%; and VA loans comprised 10.5%. The average loan size for a new home increased from $405,400 in March to $405,490 in April.

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

“New home purchase activity increased at a healthy pace in April after a slight pause in March. Applications to purchase newly constructed homes increased 22% over the year and have now shown annual gains for 15 consecutive months. There continues to be healthy demand for new homes, given greater availability and other benefits over existing home purchases such as builder concessions and customization options. First-time homebuyers account for a growing share of purchase applications with the FHA share of applications at 26.3% in April, higher than the survey average of 18% dating back to 2013. Our estimate of new home sales increased more than 13% to 699,000 units, the strongest pace in three months.”