Applications for mortgages for new home purchases decreased 9% in April compared with March but were nonetheless up 30.8% compared with April 2020, according to the Mortgage Bankers Association (MBA) Builder Application Survey (BAS).
“Purchase applications for new homes, unadjusted for typical seasonal patterns, declined in April, but the average loan size increased to its highest level in MBA’s survey,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “The purchase market remains strong overall, but low housing inventory and accelerating home prices have started to adversely impact purchase activity. Additionally, homebuilders have reported significantly higher input prices, which is contributing to the ongoing rise in sales prices and average loan sizes.
“Adjusting for these seasonal effects, MBA estimates that new home sales in April rebounded from a two-month slump, increasing 8 percent to an annualized pace of 770,000 units,” Kan adds. “While still strong, this sales pace remains below the 877,000-sales pace seen in the second half of 2020.”
The MBA estimates that sales of new single-family homes were running at a seasonally adjusted annual rate of 770,000 units in April, an increase of 7.8% compared with March.
On an unadjusted basis, the MBA estimates that there were 72,000 new home sales in April, unchanged from March.
By product type, conventional loans composed 72.9% of loan applications, FHA loans composed 15.8%, RHS/USDA loans composed 1.0% and VA loans composed 10.3%.
The average loan size of new home in April was $377,434, up from $374,353 in March.
Photo: Todd Kent