October New Home Purchase Mortgage Applications Increased 8.2 Percent
The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for October 2024 shows mortgage applications for new home purchases increased 8.2 percent compared from a year ago. Compared to September 2024, applications increased by 3 percent. This change does not include any adjustment for typical seasonal patterns.
“New home purchase activity picked up in October even as stronger economic data and election uncertainty pushed mortgage rates higher over the course of the month,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Both new applications and estimated home sales were higher compared to year-ago levels. New homes are an attractive alternative for many buyers as existing inventory is still tight in many markets around the country and a newly constructed home provides additional customization options. The average loan size picked up to almost $410,000, the highest in the survey since August 2022. However, the FHA share remains elevated at almost 29 percent, driven by a high share of first-time home buyers still active in this segment of the market.”
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 747,000 units in October 2024. 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 October is an increase of 9.9 percent from the September pace of 680,000 units. On an unadjusted basis, MBA estimates that there were 56,000 new home sales in October 2024, an increase of 3.7 percent from 54,000 new home sales in September.
By product type, conventional loans composed 60.8 percent of loan applications, FHA loans composed 28.7 percent, RHS/USDA loans composed 0.4 percent and VA loans composed 10.1 percent. The average loan size for new homes increased from $402,658 in September to $409,942 in October.
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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