Mortgage Applications for US New-Home Purchases Rise 19.0% in January

On Thursday, the Mortgage Bankers Association (MBA) reported that data from its Builder Application Survey (BAS) reveal that mortgage applications for new-home purchases increased 19.0% in January. Year-over-year, mortgage applications declined 6.0%. MBA notes that any 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 616,000 units in January, an increase of 2.5% from the December pace of 601,000 units. On an unadjusted basis, MBA estimates that there were 56,000 new-home sales in January, an increase of 21.7% from 46,000 in December.

By product type, conventional loans composed 57.8 % of loan applications; FHA loans composed 30.2%; RHS/USDA loans composed 0.5%; and VA loans composed 11.4%. The average loan size for new homes increased from $400,930 in December to $403,416 in January.

In remarks accompanying the report, MBA Vice President and Deputy Chief Economist Joel Kan said:

“Applications to purchase newly constructed homes rebounded 19% from December, but decreased from a year ago, the first annual decline in two years. At an estimated annualized pace of 616,000 units, the new-home market was subdued to start the year.

The FHA share of new-home financing continued to increase, accounting for a little more than 30% of applications, the highest share in the history of the survey. This increase is another silver lining in new-home purchase activity, as a large proportion of FHA purchase loans go to first-time homebuyers.”