Mortgage applications for new-home purchases in September decreased by 7% compared with August, according to the Mortgage Bankers Association (MBA) Builder Application Survey (BAS). On a year-over-year basis, mortgage applications decreased 13.2%.
At a seasonally adjusted annual rate, MBA estimates new single-family home sales at a pace of 637,000 units in September. The estimate is derived using mortgage application information from the BAS as well as assumptions regarding market coverage and other factors.
“New-home purchase activity declined in September as prospective home buyers pulled back in response to higher mortgage rates, increased concern about an impending recession, and a broader slowdown in home price growth,” says Joel Kan, MBA’s vice president and deputy chief economist. “The average 30-year fixed mortgage rate increased almost a full percentage point in the last month, greatly reducing the purchasing power of many shoppers.”
Kan says MBA’s estimate of new-home sales declined 9% in September, partially reversing the 18% increase in August while mortgage rates briefly decreased. On an unadjusted basis, MBA estimates that there were 52,000 new-home sales in September, a decrease of 10.3% compared with sales in August.
“The average loan size measured in the survey fell for the fifth consecutive month–after reaching a survey high in April 2022—to $406,767,” Kan says.
Conventional loans composed 69.8% of loan applications, FHA loans composed 18.7%, RHS/USDA loans composed 0.3%, and VA loans composed 11.2%.