Millennial home buyers are the most likely to bust their budget, a survey finds.
Adobe Stock/Gajus

Mortgage applications for new home purchases increased 13.8% on a year-over-year basis in May, according to the Builder Application Survey (BAS) from the Mortgage Bankers Association (MBA). Compared to April, May 2024 applications increased 1%.

“There continues to be strength in the new home purchase market, as purchase applications increase in May compared to both the prior month and from a year ago,” says Joel Kan, MBA’s vice president and deputy chief economist. “With existing-home inventory still lagging in many markets, many home buyers have turned their interest toward newly built homes, particularly FHA borrowers.”

According to Kan, the FHA share of applications was 26.5%, the highest share since November of 2023. The average loan size in May was $400,150, a decline from the April average of more than $405,000.

“MBA’s estimate of new-homes [sales] show a slight increase to 702,000 units in May, the strongest pace since October 2023,” says Kan.

MBA’s estimate for new home sales is derived using mortgage application information from the BAS as well as assumptions regarding market coverage and other factors. The seasonally adjusted estimate in May is 0.4% higher than the April pace. On an unadjusted basis, the MBA projects there were 63,000 new home sales in May, an increase of 1.6% from 62,000 new home sales in April.