Applications for mortgages for new home purchases dropped 11% in April compared with March but were up 4.1% compared with a year ago, according to the Mortgage Bankers Association’s (MBA) Builder Application Survey (BAS).
Joel Kan, vice president and deputy chief economist for the MBA, emphasizes the annual increase over the monthly decrease.
“This was the third straight month of year-over-year growth in applications, which signals improving housing demand for newly built homes at a time when the broader housing market is leaning more on new construction to boost for-sale inventory levels,” Kan says in the report. “Mortgage rates have settled in the 6.5 percent range lately and remain over a percentage point higher than last year. The higher mortgage rate environment continues to factor into homebuying and selling decisions.”
“Since the brief pick-up in new home sales in January when mortgage rates dipped, the pace of new home sales has declined for the three consecutive months,” Kan adds. “With the recently released Census data showing single-family permitting activity on the upswing and housing starts also rising, we expect that to translate to growth in new home sales activity in the second half of the year.”
Sales of new single-family homes were running at a seasonally adjusted annual rate of 649,000 units in April, a decrease of 2.6% compared with March.
There were roughly 58,000 new home sales in April, a decrease of 10.8% compared with March.
Photo: Todd Kent