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

The Mortgage Bankers Association (MBA) reported on Thursday (11-16-23) that data from its October Builder Application Survey (BAS) reveal mortgage applications for new home purchases increased 6.0% month-over-month and 39.7% year-over-year. This change does not include any adjustments for typical seasonal patterns.

According to the MBA, the seasonally adjusted estimate for October increased 12.8% from September’s pace of 634,000 units. On an unadjusted basis, the MBA estimates that there were 55,000 new home sales in October, an increase of 7.8% from 51,000 new home sales in September.

By loan product type, conventional loans comprised 63.6% of loan applications in October. FHA loads comprised 26.3%, RHS/USDA loans 0.3%, and VA loans 9.8%. The average loan size for a new home decreased from $397,550 in September to $390,225 in October.

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

“Purchase activity for newly constructed homes continued its upward climb in October with purchase applications up 40% compared to a year ago, the ninth consecutive month of annual growth. Home builders have been able to temper this high-rate environment by offering buyers rate buydowns and other incentives. We estimate that the pace of home sales increased for the third straight month to a 715,000-unit annual pace—the strongest sales month since May.

The FHA share of applications increased to 26%, the highest share since the survey began in 2013, as more first-time homebuyers turn to the new home market for more options and as some builders start to build more starter homes.”