Applications for mortgages for new home purchases increased 34% on an unadjusted basis in January compared with December and were up 18.4% compared with January 2017, according to the Mortgage Bankers Association (MBA) Builder Application Survey (BAS).
Applications for conventional mortgages accounted for 71.7% of all applications for new home sales. Applications for Federal Housing Administration loans accounted for 15.3%, while applications for Rural Housing Service/U.S. Department of Agriculture loans accounted for 1.2% and applications for Veterans Affairs loans accounted for 11.7%.
“Mortgage applications for new homes surged in January and were up 18 percent on a year over year basis,” says Lynn Fisher, vice president of research and economics for the MBA, in a release. “This complements other positive news on U.S. job growth, suggesting that economic fundamentals are strong. Based on applications, we estimate that new home sales were running at a pace of 700,000 on a seasonally adjusted annual basis – the highest such estimate in our survey, which began in 2013.”
The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 700,000 units in January. That’s an increase of 26.4% compared with an annual rate of about 554,000 units in December.
On an unadjusted basis, the MBA estimates that there were 54,000 new home sales in January, an increase of 35% compared with about 40,000 in December.