Mortgage applications for new-home purchases increased 22.1% compared with one year ago, according to the Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for April. Applications increased by 2% compared with March. This change does not include any adjustment for typical seasonal patterns.
“New-home purchase activity increased at a healthy pace in April 2024 after a slight pause in March. Applications to purchase newly constructed homes increased 22% over the year and have now shown annual gains for 15 consecutive months,” says Joel Kan, MBA’s vice president and deputy chief economist.
“There continues to be healthy demand for new homes, given greater availability and other benefits over existing-home purchases such as builder concessions and customization options. First-time home buyers account for a growing share of purchase applications with the FHA share of applications at 26.3% in April, higher than the survey average of 18% dating back to 2013. Our estimate of new-home sales increased more than 13% to 699,000 units, the strongest pace in three months.”
In April, 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 699,000 units. The new-home sales estimate is derived using mortgage application information from the BAS, assumptions regarding market coverage, and other factors.
The seasonally adjusted estimate for April is an increase of 13.7% from the March pace of 615,000 units. On an unadjusted basis, MBA estimates that there were 62,000 new-home sales in April, up 3.3% from 60,000 new-home sales in March.
Conventional loans composed 62.8% of loan applications; FHA loans, 26.3%; RHS/USDA loans, 0.3%; and VA loans, 10.5%. For new homes, the average loan size increased from $405,400 in March to $405,490 in April.
