Applications for mortgages for new home purchases decreased 5% in April compared with March but were up 7.5% compared with April 2017, according to the Mortgage Bankers Association’s (MBA) Builder Applications Survey.
“Applications for new home purchases slowed in April compared to March, decreasing five percent on an unadjusted basis, during a month where we typically expect an increase in new home purchase activity,” says Joel Kan, associate vice president of economic and industry forecasting, in a statement. “Despite the monthly decrease, application activity was still 7.5 percent higher than a year ago.
“Our estimate of new home sales decreased almost four percent from March to a seasonally adjusted annualized pace of 682,000 units,” Kan adds. “Despite a strong economy and job market, the decrease in April was likely due to a combination of rising mortgage rates and slow new construction activity, as builders still face a shortage of skilled labor and increasing materials costs, among other challenges.”
About 71.6% of all applications for new home purchases were for conventional loans, while 15.1% were for Federal Housing Administration loans, 12.1% were for Veterans Affairs loans and 1.2% were for Rural Housing Service/U.S. Department of Agriculture loans.
The average loan size of new home purchase was $336,870, down from $337,597 in March.
The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 656,000 units in April.
The seasonally adjusted estimate for April is a decrease of 3.8 percent from the March pace of 682,000 units.
On an unadjusted basis, the MBA estimates that there were 63,000 new home sales in April, a decrease of 3.1% from 65,000 in March.
