Applications for mortgages for new home purchases increased 27.1% on an unadjusted basis in November compared with October and were up 17% compared with November 2018, according to the Mortgage Bankers Association’s (MBA) Builder Application Survey.
As of the end of the month, sales of new single-family homes were running at a seasonally adjusted annual rate of 688,000, according to the MBA’s data.
That’s a decrease of 13% compared with an annual pace of 791,000 units in October.
On an unadjusted basis, the MBA estimates that there were 51,000 new home sales in November, a decrease of 16.4% compared with 61,000 in October.
By product type, conventional loans composed 69.2% of applications for new home purchases, while FHA loans composed 18.0%, VA loans composed 12.2% and RHS/USDA loans composed 0.6%.
The average loan size for a new home in November was $337,943, up from $335,235 in October.
“Applications for new home purchases continue to outperform last year’s pace, and November was no different,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in the report. “Activity last month was 27 percent higher than November 2018.”
“On a seasonally-adjusted monthly basis, new home sales decreased to the slowest pace since June 2019, which points to some weakness as this year comes to an end,” Kan adds. “The healthy job market, increased new home construction, and rising household formation support growth heading into 2020, but affordability challenges in many markets and economic uncertainty pose as headwinds.”