Applications for mortgages for new home purchases decreased 20% in April compared with March and decreased 4.3% compared with April 2016, according to the Mortgage Bankers Association’s (MBA) Builder Applications Survey.
The change does not include any adjustment for typical seasonal patterns.
However, Lynn Fisher, vice president of research and economics for the MBA, points out that April was the first month this year that applications for mortgages for new home purchases decreased, month over month.
“A relatively strong March may have pulled forward some applications from April, exacerbating the normal seasonal fall-off,” Fisher says in a statement. “On net, year-to-date applications for new homes are running about three percent above the same period from 2016. Despite steady demand for housing, home builders continue to face rising costs for labor and materials, which will continue to moderate the pace of building.”
Applications for conventional loans composed 68.5% of all applications for new homes in April, according to the report. Applications for loans for new homes backed by the Federal Housing Administration represented 17.7% of all loans, while applications for Rural Housing Service/U.S. Department of Agriculture loans composed 1.4% and Veterans Affairs loans composed 12.4%.
The average loan size for a new home in April was $326,284, down from $328,192 in March.
The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 517,000 units in April. That’s a decrease of 22.8% compared with the March pace of 670,000 units.
On an unadjusted basis, the MBA estimates that there were 50,000 new home sales in April – a decrease of 19.4% compared with about 62,000 in March.