Applications for mortgages for new home purchases fell 5% in September compared with August but were up 38.2% compared with September 2019, according to the Mortgage Bankers Association’s (MBA) Builder Application Survey (BAS).
“The strong year-over-year results for non-seasonally adjusted new home sales applications – up 38 percent – and estimated home sales – up 20 percent – are indicative of the fundamental strength seen in the housing market since the spring,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “Demand for newly built homes is strong, as many buyers appear to seek more space for work, in-home schooling and leisure.”
“However, the moderation in the seasonally adjusted sales pace the last two months could mean that demand has slowed recently – likely because of tight inventory conditions and the slowing improvement in the job market,” Kan adds.
The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 869,000 units in September – a decrease of 0.2% compared with August.
On an unadjusted basis, MBA estimates that there were 67,000 new home sales in September – a decrease of 1.5% compared with August. However, new home sales were well-above year-ago levels.
By product type, conventional loans composed 71.3% of applications for new home purchases, FHA loans composed 17.8%, RHS/USDA loans composed 0.8% and VA loans composed 10.1%.
The average loan size for a new home purchased in September increased to $354,316 – up from $348,576 in August.