Applications for mortgages for new home purchases increased 4% in February compared with January and were up 1.2% compared with February 2022, according to the Mortgage Bankers Association (MBA).
“Applications for purchase new home sales were up in February and from the same time a year ago,” says Joel Kan, vice president and deputy chief economist for the MBA, in a statement. “The uptick in new home purchase applications showed a seasonal pick up, and that segment of the market continues to show healthier activity than the broader purchase market, which is still showing annual declines of over 30 percent.
“Buyers, however, remain extremely sensitive to movements in mortgage rates and the broader economy. Mortgage rates picked up in February, which put a damper on housing activity,” Kan says.
“The 5 percent drop in the estimated new home sales pace for February to 688,000 units reversed a January gain when buyers had a brief respite from rising mortgage rates, combined with discounts and concessions from sellers,” he adds. “The decline in new home sales is likely less than that for existing home sales as home builders are motivated to sell homes in their construction pipeline.”
Sales of new single-family homes were running at a seasonally adjusted annual rate of 688,000 units in February, according to the report. That’s a decrease of 5.1% from the January pace of 725,000 units.
On an unadjusted basis, the MBA estimates that there were 61,000 new home sales in February, a decrease of 3.2% compared with 63,000 in January.
Photo: Scott Graham