Mortgage applications for new-home purchases increased 6.2% in March compared with a year ago, according to the Mortgage Bankers Association (MBA) Builder Application Survey (BAS).

MBA vice president and deputy chief economist Joel Kan says March is historically a month where activity experiences “a seasonal boost,” but March activity increased just 1% compared with February levels.

“Applications were still ahead of last year’s pace, but, at 6%, the annual growth rate was the slowest since September 2023,” Kan says. “Home buyers remain adversely impacted by strong home-price growth and mortgage rates hovering around 7%.”

The FHA share of applications increased to 26.4% after averaging 24% for the prior 12 months, according to Kan. He says a higher FHA share is indicative of more first-time buyer activity, “but that segment of buyers is also more sensitive to affordability challenges.”

“MBA’s estimate of new-home sales fell more than 10% over the month to a seasonally adjusted pace of 615,000 units, the slowest annual pace in four months,” Kan adds.

The MBA estimates single-family sales based on mortgage application information from the BAS as well as assumptions regarding market coverage and other factors. The seasonally adjusted March estimate of 615,000 is 10.7% lower than the February pace of 689,000. On an unadjusted basis, MBA estimates there were 60,000 new-home sales in March, a decrease of 3.2% from 62,000 in February.

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