Compared with a year ago, new-home mortgage applications decreased 25.2% in November, according to the Mortgage Bankers Association (MBA) Builder Application Survey (BAS). Applications increased by 1% compared with October, and the change does not include any adjustment.
“New-home purchase applications recovered slightly in November, as mortgage rates retreated from their October highs and brought some prospective buyers back into a market that still faces affordability challenges,” says Joel Kan, MBA’s vice president and deputy chief economist.
“Similarly, estimated new-home sales for November saw an annual pace of 660,000 units—a 10% increase from October. While mortgage rates remain high compared with the past few years, the 30-year fixed rate was 6.49% at the end of November after reaching 7.16% in mid-October, providing a slight boost in purchasing power for buyers. However, both applications and sales remained over 20% below last year’s pace.”
The new-home sales estimate uses mortgage application information from the BAS and assumptions regarding market coverage and other factors. For November, the seasonally adjusted estimate is an increase of 10.4% from the October pace of 598,000 units. MBA estimates that there were 49,000 new-home sales in November on an unadjusted basis, an increase of 4.3% from the 47,000 October new-home sales.
“Reflecting the slowdown at the upper end of the market, the average loan size on new-home purchase applications was $392,465, the lowest since June 2021,” Kan adds. By product type, conventional loans composed 67.6% of loan applications; FHA loans, 21.3%; RHS/USDA loans, 0.2%; and VA loans, 10.9%.
MBA’s BAS tracks application volume from mortgage subsidiaries of home builders across the country. MBA can provide an early estimate of new-home sales volumes at the national, state, and metro level by using this data in addition to other sources.