Application volume for new home purchases increased 8%, on an unadjusted basis, in October compared to September, according to the Mortgage Bankers Association (MBA) Builder Application Survey (BAS).
The average loan size for a new home reached $300,289 in October, up from $298,274 in September.
Mike Fratantoni, chief economist for the MBA, says a lot of the increase was due to purchases of higher-priced new homes.
‘The continued improvement in the job market and still low mortgage rates are supporting the upper levels of the purchase market, while the tight credit environment continues to constrain sales at the entry level,’ he says in a statement.
As of October, single-family new home sales were running at a seasonally adjusted annual rate of about 461,000 units.
On a seasonally adjusted basis, applications for new homes were up about 8.5% according to the report.
On an unadjusted basis, the MBA estimates that there were 36,000 new home sales in October, an increase of 12.5% from 32,000 new home sales in September.
Of the applications for new home purchase filed in October, 68.2% were for conventional loans, 16.2% were for Federal Housing Administration loans, 1.5% were for Rural Housing Service/U.S. Department of Agriculture loans, and 14.2% were for Veterans Affairs loans.