The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for December 2023 shows mortgage applications for new home purchases increased 22.2 percent compared from a year ago. Compared to November 2023, applications decreased by 4 percent. This change does not include any adjustment for typical seasonal patterns.
“The low level of existing homes for sale continues to divert prospective buyers to newly built homes. Mortgage applications for new homes showed a 22 percent annual gain in December – the 11th consecutive year-over-year increase in applications,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Compared to November 2023, applications were down 4 percent on a non-seasonally adjusted basis, consistent with December declines for the past two years.”
MBA estimates new single-family home sales, which has consistently been a leading indicator of the U.S. Census Bureau’s New Residential Sales report, is that new single-family home sales were running at a seasonally adjusted annual rate of 599,000 units in December 2023. 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 seasonally adjusted estimate for December is a decrease of 11.5 percent from the November pace of 677,000 units. On an unadjusted basis, MBA estimates that there were 46,000 new home sales in December 2023, a decrease of 6.1 percent from 49,000 new home sales in November.
By product type, conventional loans composed 64.5 percent of loan applications, FHA loans composed 25.1 percent, RHS/USDA loans composed 0.5 percent and VA loans composed 9.9 percent. The average loan size for new homes increased from $390,049 in November to $405,368 in December.
MBA’s Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country. Utilizing this data, as well as data from other sources, MBA is able to provide an early estimate of new home sales volumes at the national, state, and metro level. This data also provides information regarding the types of loans used by new home buyers. Official new home sales estimates are conducted by the Census Bureau on a monthly basis. In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.
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