Although sales of existing homes have been languishing as of late, strong demand for new construction is driving up new home sales, the Mortgage Bankers Association (MBA) reports.
Sales of new single-family homes were running at a seasonally adjusted annual rate of 543,000 units in January, based on data from MBA's Builder Applications Survey (BAS).
Mike Fratantoni, chief economist for the MBA, notes that while the ‘big jump may appear to conflict with other data, such as MBA's purchase application index and National Association of Realtors' existing home sales data that point to a weak market for existing homes, our BAS estimate is consistent with reports of homebuilder sentiment that show strength in the market for new homes.’
On an unadjusted basis, the MBA estimates that there were 38,000 new home sales in January, a 36% increase compared to the approximately 28,000 units that sold in December.
What's more, mortgage applications for new home purchases increased by 27% compared to the previous month.
By product type, conventional loans composed 69.4% of loan applications, Federal Housing Administration loans composed 15.9%, Rural Housing/U.S. Department of Agriculture loans composed 1.3% and Veteran's Affairs loans composed 13.4%. The average loan size for new homes decreased from $300,444 in December to $289,358 in January.