Applications for mortgages for new home purchases increased 2% in April compared with March and were up 22.1% compared with April 2023, according to the Mortgage Bankers Association’s (MBA) Builder Application Survey (BAS).
“New home purchase activity increased at a healthy pace in April 2024 after a slight pause in March,” says Joel Kan, vice president and deputy chief economist for the MBA, in a statement. “Applications to purchase newly constructed homes increased 22 percent over the year and have now shown annual gains for 15 consecutive months.
“There continues to be healthy demand for new homes, given greater availability and other benefits over existing home purchases such as builder concessions and customization options,” Kan adds. “First-time homebuyers account for a growing share of purchase applications with the FHA share of applications at 26.3 percent in April, higher than the survey average of 18 percent dating back to 2013. Our estimate of new home sales increased more than 13 percent to 699,000 units, the strongest pace in three months.”
New single-family home sales were running at a seasonally adjusted annual rate of about 699,000 units in April, according to the MBA.
The seasonally adjusted estimate for April is an increase of 13.7% from the March pace of 615,000 units.
On an unadjusted basis, MBA estimates that there were 62,000 new home sales in April, an increase of 3.3% from 60,000 new home sales in March.
By product type, conventional loans composed 62.8% of new home purchase applications. FHA loans composed 26.3%, RHS/USDA loans composed 0.3% and VA loans 10.5%.
The average loan size for a new home sold in April was $405,490, up from $405,400 in March.
Photo: Alexander Andrews