December New Home Purchase Mortgage Apps Decreased 7.1%

The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for December 2021 shows mortgage applications for new home purchases decreased 7.1 percent compared from a year ago. Compared to November 2021, applications decreased by 5 percent. This change does not include any adjustment for typical seasonal patterns.

“Applications to buy a new home slowed in December, while the activity remained tilted to higher-priced homes,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Supply chain challenges, labor shortages, and higher materials costs also contributed to last month’s decline, as projects were delayed or cost more to complete. The average loan size set another survey record at $423,102, as these higher building costs are pushing sales prices higher.”  

MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 887,000 units in December 2021, based on data from the BAS. 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 2 percent from the November pace of 905,000 units. On an unadjusted basis, MBA estimates that there were 60,000 new home sales in December 2021, a decrease of 7.7 percent from 65,000 new home sales in November. 

By product type, conventional loans composed 77.2 percent of loan applications, FHA loans composed 12.6 percent, RHS/USDA loans composed 0.4 percent and VA loans composed 9.8 percent. The average loan size of new homes increased from $414,114 in November to $423,102 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.