New Home Mortgage Applications Increase Modestly Month-Over-Month but Declined Year-Over-Year in November

The Mortgage Bankers Association (MBA) reported on Tuesday (12-20-22) that data from their Builder Application Survey (BAS) for November revealed that mortgage applications for new home purchases increased 1% month-over-month but were down 25.2% year-over-year. The changes do not include any adjustment for typical seasonal patterns.

Based on data from the BAS, the MBA estimates the seasonally adjusted estimate for November is an increase of 10.4% from the October pace of 598,000 units. On an unadjusted basis, MBA estimates that there were 49,000 new home sales in November 2022, an increase of 4.3% from 47,000 new home sales in October.

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

“New home purchase applications recovered slightly in November, as mortgage rates retreated from their October highs and brought some prospective buyers back into a market that still faces affordability challenges. Similarly, estimated new home sales for November saw an annual pace of 660,000 units—a 10 percent increase from October. While mortgage rates remain high compared to the past few years, the 30-year fixed rate was 6.49 percent at the end of November after reaching 7.16 percent in mid-October, providing a slight boost in purchasing power for buyers. However, both applications and sales remained over 20 percent below last year’s pace.

Reflecting the slowdown at the upper end of the market, the average loan size on new home purchase applications was $392,465, the lowest since June 2021.”