Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for September 2022 shows mortgage applications for new home purchases decreased 13.2% compared from a year ago. Compared to August 2022, applications decreased by 7%. This change does not include any adjustment for typical seasonal patterns.
MBA estimates new single-family home sales, which has consistently been a leading indicator of the U.S. Census Bureau’s New Residential Sales report, is that new single-family home sales were running at a seasonally adjusted annual rate of 637,000 units in September 2022, 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 purchase activity declined in September as prospective homebuyers pulled back in response to higher mortgage rates, increased concern about an impeding recession, and a broader slowdown in home-price growth,” observes Joel Kan, MBA’s vice president and deputy chief economist. “The average 30-year fixed mortgage rate increased almost a full percentage point in the last month, greatly reducing the purchasing power of many home shoppers. MBA’s estimate of new home sales declined 9 percent in September, partially reversing the 18 percent increase in August during that brief period when mortgage rates decreased.
“The average loan size measured in the survey fell for the fifth consecutive month – after reaching a survey high in April 2022 – to $406,767,” adds Kan.
The seasonally adjusted estimate for September is a decrease of 8.9% from the August pace of 699,000 units. On an unadjusted basis, MBA estimates that there were 52,000 new home sales in September 2022, a decrease of 10.3% from 58,000 new home sales in August.
By product type, conventional loans composed 69.8% of loan applications, FHA loans composed 18.7%, RHS/USDA loans composed 0.3% and VA loans composed 11.2%. The average loan size of new homes decreased from $415,594 in August to $406,767 in September.
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