Applications for mortgages for new home purchases fell 7% in November compared with October but were up 3.1% compared with a year ago, according to the Mortgage Bankers Association’s (MBA) Builder Application Survey (BAS).
“While the arrival date of official data from the Census Bureau on the pace of new home sales remains ‘TBD,’ according to the Census website, MBA’s Builder Application Survey data show that new home purchase activity was up 3 percent on an annual basis in November, and down 7 percent from the prior month,” says Mike Fratantoni, senior vice president and chief economist for the MBA, in a statement. “Mortgage rates have remained in a narrow range, and inventories of both new and existing homes on the market have increased. Potential buyers have more homes to choose from, and this removal of supply constraints is leading to a stronger sales pace.”
“New homebuyers continue to look for ways to extend their purchasing power or lower monthly payments, with 37 percent of new homebuyers using a mortgage choosing an FHA loan, and 24% choosing an ARM loan,” he adds.
New single-family home sales in November were running at a seasonally adjusted annual rate of 755,000 units, down 2.1% compared with the October pace of 771,000 units.
On an unadjusted basis, MBA estimates that there were 51,000 new home sales in November, a decrease of 7.3% compared with 55,000 in October.
By product type, conventional loans comprised 49.5% of applications for new home purchases, FHA loans comprised 37.1%, RHS/USDA loans comprised 0.7% and VA loans comprised 12.7%.
The average loan size for new home in November was $378,063, down from $381,404 in October.
Photo: Todd Kent