US New-Home Purchase Mortgage Applications Decline in September

On Thursday, the Mortgage Bankers Association (MBA) reported that mortgage applications for new-home purchases fell 8.0% in September from August, according to data from its Builder Application Survey. Applications were down 8.3% year-over-year. Changes are not seasonally adjusted.

MBA estimates new single-family home sales were running at a seasonally adjusted annual rate (SAAR) of 584,000 units in September, a 12.0% decrease from the August pace of 664,000 units. On an unadjusted basis, MBA estimates that there were 47,000 sales in September, a 9.6% decrease from 52,000 in August.

By product type, conventional loans accounted for 50.2% of applications, FHA loans 34.7%, VA loans 14.1%, and RHS/USDA loans 1.0%. The average loan size increased from $373,194 in August to $374,724 in September.

Commenting on the report, MBA Vice President and Deputy Chief Economist Joel Kan said:

“The increase in mortgage rates in September had a chilling effect for new-home purchase activity. Both mortgage applications and new home sales declined and fell further behind last year’s pace. MBA’s estimate of new home sales at 584,000 units was the weakest sales pace since April 2020. The FHA share of applications decreased, and the average loan size increased, as higher mortgage rates had a greater impact on first-time homebuyers’ purchase decisions.”