MBA: Applications For New Home Purchases Fell in September

Applications for mortgages for new home purchases decreased for a second straight month in September, falling 3.9% compared with August, according to the Mortgage Bankers Association’s (MBA) Builder Application Survey.

However, they were up 8.2% compared with September 2017.

In August, applications for new home purchases fell 2% month-over-month and 4.6% year-over-year.

In a statement, Joel Kan, associate vice president of economic and industry forecasting for the MBA, says despite the slowdown in applications “the average monthly number of homes sold so far this year – 648,000 units – is around eight percent higher than a year ago, and last month’s 8.2 percent annualized gain in purchase applications points to continued demand for new homes.”

“Housing demand is still strong even as mortgage rates increase, and as a result, we’re still forecasting for modest growth in purchase origination volume in 2018,” Kan adds.

The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 643,000 units in September.

On an unadjusted basis, the MBA estimates that there were 50,000 new home sales in September, a decrease of 5.7% compared with 53,000 in August.

By product type, conventional loans composed 71.0% of applications for new home sales in September. FHA loans composed 16.0%, RHS/USDA loans composed 1.1% and VA loans composed 11.9%.

The average loan size for a new home in September was $333,086, up from $332,801 in August.

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