Applications for New Home Purchases Sank in December but Remain Up Year Over Year

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Applications for mortgages for new home purchases decreased 4% in December compared with November but were up 22.2% compared with December 2022, according to the Mortgage Bankers Association’s (MBA) Builder Application Survey (BAS).

“The low level of existing homes for sale continues to divert prospective buyers to newly built homes,” says Joel Kan, vice president and deputy chief economist for the MBA, in a statement.” Mortgage applications for new homes showed a 22 percent annual gain in December – the 11th consecutive year-over-year increase in applications.

“Compared to November 2023, applications were down 4 percent on a non-seasonally adjusted basis, consistent with December declines for the past two years,” Kan adds.

New home sales were running at a seasonally adjusted annual rate of 599,000 units in December, a decrease of 11.5% compared with November. 

For the month, there were about 46,000 new home sales, a decrease of 6.1% compared with November. 

By product type, conventional loans composed 64.5% of loan applications, FHA loans composed 25.1%, RHS/USDA loans composed 0.5% and VA loans composed 9.9%.

The average loan size for a new home in December was $405,368, up from $390,049 in November.

Photo: Alexander Andrews

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