Mortgage applications for new home purchases were up by 4.1% in April from one year ago but were down 11% from March, according to new data from the Mortgage Bankers Association (MBA).
The MBA estimated that new single-family home sales were running at a seasonally adjusted annual rate of 649,000 units in April, down by 2.6% from the 666,000 units recorded in March. On an unadjusted basis, MBA estimated that there were 58,000 new home sales in April, a 10.8% drop from the 65,000 new home sales in March.
The average loan size of new homes declined from $407,015 in March to $401,756 in April. By product type, conventional loans composed 66.2% of loan applications, FHA loans composed 23.4%, VA loans accounted for 10% and RHS/USDA loans occupied 0.4% of the market.
“This was the third straight month of year-over-year growth in applications, which signals improving housing demand for newly built homes at a time when the broader housing market is leaning more on new construction to boost for-sale inventory levels,” said MBA’s Vice President and Deputy Chief Economist Joel Kan. “Mortgage rates have settled in the 6.5% range lately and remain over a percentage point higher than last year. The higher mortgage rate environment continues to factor into homebuying and selling decisions.”
Kan added, “Since the brief pick-up in new home sales in January when mortgage rates dipped, the pace of new home sales has declined for the three consecutive months. With the recently released Census data showing single-family permitting activity on the upswing and housing starts also rising, we expect that to translate to growth in new home sales activity in the second half of the year.”
Source: WRE News