The Mortgage Bankers Association’s (MBA) Builder Application Survey (BAS) data for November 2021 shows mortgage applications for new home purchases decreased 2.2% compared from a year ago. Compared to October 2021, applications decreased by 3%. This change does not include any adjustment for typical seasonal patterns.
“Applications to purchase new homes in November slightly declined on a monthly and annual basis,” mentions Joel Kan, MBA’s associate vice president of economic and industry forecasting. “However, the average loan amount increased to a new record of $414,114. A competitive purchase market, combined with increased building materials costs, have been pushing sales prices higher. There also continues to be a shift to the higher end of the market, which is also contributing to the higher loan amounts.”
MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 905,000 units in November 2021, based on data from the BAS. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.
“New home sales had a strong month, with more home buyers choosing newly built homes,” continues Kan. “Home sales edged higher over the month to the strongest annual pace since January 2021 at 905,000 units, as limited for-sale inventory has driven more demand to the new home segment. MBA’s November estimate for new home sales is the largest for the month since the survey began in 2012.”
The seasonally adjusted estimate for November is an increase of 0.9% from the October pace of 897,000 units. On an unadjusted basis, MBA estimates that there were 65,000 new home sales in November 2021, a decrease of 4.4% from 68,000 new home sales in October.
By product type, conventional loans composed 76.3% of loan applications, FHA loans composed 13.2%, RHS/USDA loans composed 0.5% and VA loans composed 10%. The average loan size of new homes increased from $412,339 in October to $414,114 in November.
Read the MBA’s Builder Application Survey here.