US New-Home Purchase Mortgage Applications Decrease in September

On Thursday, the Mortgage Bankers Association (MBA) reported that mortgage applications for new-home purchases fell 5.0% in September, according to its Builder Application Survey. Year-over-year, applications increased 6.0%. Changes are not seasonally adjusted.

MBA estimates that new single-family home sales were running at a seasonally adjusted annual rate (SAAR) of 680,000 units in September, a 6.8% decrease from the August pace of 730,000 units. On an unadjusted basis, MBA estimates 54,000 new-home sales in September, down 3.6% from 56,000 in August.

By product type, conventional loans accounted for 52.5% of applications, FHA loans 33.8%, VA loans 12.6%, and RHS/USDA loans 1.0%. The average loan size increased from $374,288 in August to $379,107 in September.

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

“MBA’s estimate of new-home sales for September showed a 7% decline to an annual pace of 680,000 units after reaching a 10-month high in August. Given the current delay of the US Census new home sales release due to the ongoing government shutdown, MBA’s estimate provides a leading indicator of the direction of the new home sales market for September. Purchase activity for new homes continued to run ahead of last year’s pace, showing a 2% annual increase. Applications were down over the month but were consistent with typical seasonal patterns for September. Despite more inventory, builder incentives, and lower mortgage rates, near-term demand is slowing as the labor market weakens.”