Applications for mortgages for new home purchases decreased 5% in September compared with August but were up 2% compared with September 2024, according to the Mortgage Bankers Association’s (MBA) Builder Application Survey (BAS).
The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 680,000 units, a decrease of 6.8% compared with August.
On an unadjusted basis, the MBA estimates there were 54,000 new home sales in September, a decrease of 3.6% compared with August.
“Given the current delay of the U.S. 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,” says Joel Kan, vice president and deputy chief economist for the MBA, in a statement. “Purchase activity for new homes continued to run ahead of last year’s pace, showing a 2 percent 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.”
By product type, conventional loans represented 52.5% of applications for new home purchases in September; FHA loans represented 33.8%; RHS/USDA loans represented 1.0%; and VA loans represented 12.6%.
The average loan size for a new home increased to $379,107 in September, up from $374,288 in August.
Photo: Alexander Andrews