Applications for mortgages for new home purchases increased 38% on an unadjusted basis in January compared with December and were up 19.1% compared with January 2023, according to the Mortgage Bankers Association’s (MBA) Builder Application Survey (BAS).
“Applications for new home purchases were strong in January, as newly built homes remained an attractive option for prospective homebuyers who looked to take advantage of lower mortgage rates during the month,” says Joel Kan, vice president and deputy chief economist for the MBA, in a statement. “Applications were up 19 percent from a year ago – the 12th consecutive annual increase – and the non-seasonally adjusted index was the strongest January reading in the survey’s history. The seasonally adjusted annualized pace of new home sales was 700,000 units, the highest sales pace since October 2023.”
New single-family home sales were running at a seasonally adjusted annual rate of 700,000 units in January, according to the MBA. That’s an increase of 16.9% compared with December.
Month-over-month, the MBA estimates that there were 63,000 new home sales in January, an increase of 37% from 46,000 new home sales in December.
By product type, conventional loans composed 64.5% of loan applications for new home sales, while FHA loans composed 24.8%, RHS/USDA loans composed 0.4% and VA loans composed 10.3%.
The average loan size for a new home in January was $401,282, down from $405,368 in December.
Photo: Alexander Andrews