Applications for mortgages for new home purchases plummeted 12% in November compared with October, due to higher mortgage rates, but were up 7.2% compared with November 2023, according to the Mortgage Bankers Association.
“Applications to purchase newly built homes have seen annual increases since February 2023, as prospective homebuyers continue to favor new homes, given affordability challenges and constrained existing inventory,” says Joel Kan, vice president and deputy chief economist, in the group’s latest Builder Application Survey (BAS) report. “The decline in applications from the previous month was roughly in-line with typical seasonal patterns at the end of the year. The FHA share of applications, at 28 percent, continues to show that first-time homebuyers account for a significant share of new home demand. Additionally, the 713,000 unit seasonally adjusted annual pace of new home sales was the third strongest month of 2024.”
The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 713,000 units in November – a decrease of 4.6% compared with October.
On an unadjusted basis, the MBA estimates that there were 49,000 new home sales in November, a decrease of 12.5% compared with October.
By product type, conventional loans composed 61.6% of loan applications, FHA loans composed 28.0%, RHS/USDA loans composed 0.4% and VA loans composed 9.9%.
The average loan size for a new home was $402,873 in November, down from $409,942 in October.
Photo: Alexander Andrews