Compared with December 2022, new-home mortgage applications increased 22.2% last month but fell 4% compared with November. The 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% annual gain in December—the 11th consecutive year-over-year increase in applications,” says Joel Kan, MBA’s vice president and deputy chief economist. “Compared to November 2023, applications were down 4% on a nonseasonally 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—were running at a seasonally adjusted annual rate of 599,000 units in December. The new-home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.
From the November pace of 677,000 units, the seasonally adjusted estimate for December is a drop of 11.5%. On an unadjusted basis, MBA estimates there were 46,000 new-home sales in December, a decline of 6.1% from 49,000 new-home sales in November.
Conventional loans composed 64.5% of loan applications; FHA loans composed 25.1%; RHS/USDA loans composed 0.5%; and VA loans composed 9.9%. In December, the average loan size for new homes increased from $390,049 in November to $405,368.
