The Mortgage Bankers Association’s Builder Application Survey data for December shows mortgage applications for new home purchases edged up by just 0.2 percent from November but improved by 42.2 percent from a year ago.
The survey does not include any adjustment for typical seasonal patterns.
By product type, conventional loans composed 73.3 percent of loan applications, FHA loans composed 15.8 percent, RHS/USDA loans composed 0.9 percent and VA loans composed 10 percent. The average loan size of new homes increased from $357,554 in November to $367,502 in December.
“The new home sales market closed out 2020 strongly,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Despite the ongoing economic impact of the pandemic, households seeking more space, assisted by low mortgage rates, drove the demand for new homes higher.”
Kan added in the coming months, “we expect homebuilding to continue to ramp-up to meet demand. Housing inventory, particularly for existing homes, is still extraordinarily tight.”
MBA estimated new single-family home sales at a seasonally adjusted annual rate of 876,000 units in December, based on data from the BAS, an increase of 5.9 percent from the November pace of 827,000 units. On an unadjusted basis, MBA estimated 59,000 new home sales in December, unchanged from November.
The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.
The MBA Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country. Using these data, as well as data from other sources, MBA provides an early estimate of new home sales volumes at the national, state and metro level. These data also provide information regarding types of loans used by new home buyers. Official new home sales estimates are conducted by the Census Bureau on a monthly basis. In those data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.
For additional information on MBA’s Builder Applications Survey, click https://www.mba.org/news-research-and-resources/research-and-economics/single-family-research/builder-applications-survey.