Applications for mortgages for new home purchases decreased 13% in December compared with November and were down 6.1% compared with December 2017, according to the Mortgage Bankers Association’s (MBA) Builder Application Survey (BAS).
This change does not include any adjustment for typical seasonal patterns.
“New home sales declined for the second straight month in December, from 627,000 units to 552,000 units, as factors such as a volatile stock market and economic uncertainty, both here and abroad, likely kept some prospective buyers away,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “This pullback in activity was in spite of falling mortgage rates and a robust job market. Looking ahead, if mortgage rates remain low, housing inventory rises, and home-price growth continues to steady, we expect to see a rebound in purchase activity this spring.”
The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 552,000 units in December, based on data from the BAS. That’s a decrease of 12% compared a pace of 627,000 units in November.
On an unadjusted basis, the MBA estimates that there were 37,000 new home sales in December, a decrease of 17.8% from 45,000 in November.
By product type, conventional loans composed 69.5% of loan applications for new home purchases; FHA loans composed 17.3%, RHS/USDA loans composed 0.7% and VA loans composed 12.5%.
The average loan size for a new home increased was $334,944, up from $326,037 in November.