21.8% INCREASE IN NEW HOME PURCHASE MORTGAGE APPLICATIONS

21.8% INCREASE IN NEW HOME PURCHASE MORTGAGE APPLICATIONS

Mortgage applications for new home purchases during November recorded a 21.8% year-over-year increase, according to new data from the Mortgage Bankers Association (MBA). Compared to October 2023, applications were down by 12%.

MBA estimated new single-family home sales were running at a seasonally adjusted annual rate of 677,000 units in November, down by 5.3% from the October pace of 715,000 units. On an unadjusted basis, MBA estimates that there were 49,000 new home sales in November, down by 10.9% from 55,000 new home sales in October. The average loan size for new homes decreased from $390,225 in October to $390,049 in November.

When examined by product type, the MBA determined conventional loans composed 62.8% of loan applications, with FHA loans accounting for 27.1%, VA loans for 9.7% and RHS/USDA loans at 0.3%.

“Lending on new construction has been the one bright spot in an otherwise slow year for purchase originations,” said Mike Fratantoni, MBA’s senior vice president and chief economist. “That trend continued in November, with applications to purchase a new home up 22% compared to last year, while the purchase market as a whole remains about 20% behind last year’s pace. It is also interesting to see that a growing portion of this demand for new homes is being financed by FHA loans. This is a sign that first-time buyers remain a strong force in this market. We are forecasting that lower rates should help to keep this demand strong as we enter the spring homebuying season.”