US Mortgage Applications for New-Home Purchases Increase 3.0% in October

On Tuesday, the Mortgage Bankers Association (MBA) reported that data from its Builder Application Survey (BAS) reveals that mortgage applications for new-home purchases in October increased 3.0% month-over-month and 8.2% 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 747,000 units in October, an increase of 9.9% from the September pace of 680,000 units.

On an unadjusted basis, MBA estimates that there were 56,000 new-home sales in October, an increase of 3.7% from 54,000 in September.

By loan product type, conventional loans comprised 60.8% of loan applications in October; FHA loans comprised 28.7%; RHS/USDA loans comprised 0.4%; and VA loans comprised 10.1%. The average loan size for a new home increased from $402,658 in September to $409,942 in October.

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

“New-home purchase activity picked up in October even as stronger economic data and election uncertainty pushed mortgage rates higher over the course of the month. Both new applications and estimated home sales were higher compared to year-ago levels. New homes are an attractive alternative for many buyers as existing inventory is still tight in many markets around the country and a newly constructed home provides additional customization options. The average loan size picked up to almost $410,000, the highest in the survey since August 2022. However, the FHA share remains elevated at almost 29%, driven by a high share of first-time home buyers still active in this segment of the market.”