Mortgage applications for new-home purchases increased 15.7% year over year in February, according to the Mortgage Bankers Association (MBA).
The MBA’s Building Application Survey indicates mortgage applications increased 1% in February compared with the previous month.
“New-home purchase activity in February was slightly hampered by the rise in mortgage rates over the month. However, home buyers kept their demand despite how competitive the purchase market still is, driving the level of applications to 16% ahead of last year’s pace,” says Joel Kan, MBA’s vice president and deputy chief economist.
MBA estimates new single-family home sales ran at a seasonally adjusted annual rate of 689,000 units in February. The new-home sales estimate was derived using mortgage application information from the Builder Application Survey as well as market assumptions. The estimate represents a decline of 1.6% from the January pace of 700,000.
On an unadjusted basis, the MBA estimates there were 62,000 new-home sales in February, down slightly from 63,000 in January.
“The average loan size increased to its highest level since March 2023 at almost $406,000, but it was still below the record high in MBA’s survey of more than $436,000 in April 2022,” says Kan. “The FHA share of purchase applications, which provides a read on first-time home buyer activity, increased to 25.7%, indicating that first-time buyers continue to turn to new homes due to the lack of affordable existing-home options.”
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