New Home Purchase Mortgage Applications Decline Month-Over-Month and Year-Over-Year in February

According to the Mortgage Bankers Association’s (MBA) Builder Application Survey (BAS) for February 2022, mortgage applications for new home purchases declined -3.9% year-over-year. When compared to January 2022, applications decreased by -1.0%. 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 791,000 units in February 2022, 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 -3.7% from the January pace of 821,000 units. On an unadjusted basis, MBA estimates that there were 66,000 new home sales in February 2022, unchanged from the new home sales level in January.

In a statement prepared for the release of the February 2022 BAS, Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting said:

“New home purchase activity slowed in February, as for-sale inventories remained tight, and mortgage rates increased to their highest levels since 2019. February is typically the start of the spring home buying season, but applications to purchase a new home were down on a monthly and annual basis. MBA estimates that new home sales declined for the third consecutive month, hitting the lowest sales pace in seven months at 791,000 units. Over the last three months, mortgage rates have increased over 70 basis points, and combined with elevated sales prices, that is putting a weight on purchase activity. The decline in activity was also consistent with somewhat weaker homebuilder sentiment and increased uncertainty for the industry as the crisis in Ukraine has worsened the situation for building material prices and availability.”