Applications for mortgages for new home purchases decreased 12% in November compared with October but were up 21.8% compared with November 2022, according to the Mortgage Bankers Association’s (MBA) Builder Application Survey (BAS).
“Lending on new construction has been the one bright spot in an otherwise slow year for purchase originations,” says Mike Fratantoni, senior vice president and chief economist for MBA, in a statement. “That trend continued in November, with applications to purchase a new home up 22 percent compared to last year, while the purchase market as a whole remains about 20 percent behind last year’s pace.
“It is also interesting to see that a growing portion of this demand for new homes is being financed by FHA loans,” Fratantoni adds. “This is a sign that first-time buyers remain a strong force in this market. We are forecasting that lower rates should help to keep this demand strong as we enter the spring homebuying season.”
MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 677,000 units in November – a decrease of 5.3% compared with October.
On an unadjusted basis, MBA estimates that there were 49,000 new home sales in November, a decrease of 10.9% from 55,000 new home sales in October.
The average loan size for a new home decreased from $390,225 in October to $390,049 in November.
Photo: Alexander Andrews