According to the Mortgage Banker Association (MBA) Builder Application Survey (BAS) for October 2021, year-over-year mortgage applications for new home purchases decreased -15.2%. Compared to September 2021, applications increased by 6%.
Based on the data from the BAS, the MBA estimates that new single-family homes sales were running at a seasonally adjusted annual rate (SAAR) of 897,000 units in October 2021. The seasonally adjusted estimate for October is an increase of 6.4% from the September pace of 843,000 units. On an unadjusted basis, MBA estimates that there were 68,000 new home sales in October 2021, an increase of 3% from 66,000 new home sales in September.
In a statement prepared for the October BAS, Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting said, “Applications for new home purchases in October were down 15 percent from a year ago, but activity was 6 percent higher than in September. The strong monthly gain puts MBA’s estimate of new home sales at its strongest pace since January 2021. Purchase activity continues to be dominated by higher loan balance transactions, which pushed the average new home loan size up to over $412,000, another new record in the survey. Recent U.S. Census data show an increasing share of new sales are for homes yet to be built or still under construction, and a shrinking share of completed homes. Housing demand remains strong, and buyers are making quick decisions in a still very competitive market.”
“Homebuilders still face delays and challenges from supply-chain bottlenecks and rising costs,” Kan added. “Overall construction costs, as measured by the Producer Price Index (PPI), recorded an annual increase of 12.3 percent in October, which is almost five times the average annual change.”
FEA compiles the Wood Markets News from various 3rd party sources to provide readers with the latest news impacting forest product markets. Opinions or views expressed in these articles do not necessarily represent those of FEA.
October New Home Purchase Mortgage Applications Decreased 15.2 Percent