Applications for mortgages for new home purchases increased 0.3% in February compared with January but were down 6.9% compared with February 2024, according to the Mortgage Bankers Association’s (MBA) Builder Application Survey (BAS).
“New home purchase activity strengthened in February, in line with seasonal patterns, as higher housing inventory and declining rates supported growth,” says Joel Kan, vice president and deputy chief economist for the MBA, in a statement. “However, applications to purchase newly built homes were lower than a year ago for the second straight month. The FHA share of applications reached its highest share in the survey, accounting for almost a third of applications. The average loan size declined, indicating that first-time homebuyers remain active in the new home purchase market.”
“MBA’s estimate of seasonally adjusted new home sales increased for the second consecutive month to its highest pace in three months,” Kan adds.
New single-family home sales were running at a seasonally adjusted annual rate of 634,000 units in February, according to the MBA. That’s an increase of 2.9% from the January pace of 616,000 units.
On an unadjusted basis, the MBA estimates that there were 57,000 new home sales in February, an increase of 1.8% from 56,000 in January.
By product type, conventional loans composed 56.7% of applications for new home purchases, while FHA loans composed 32.1%, RHS/USDA loans composed 0.6% and VA loans composed 10.6%.
The average loan size for a new home decreased to $397,516, down from $403,416 in January.
Photo: Todd Kent