Updated figures show a strong purchase market
Purchase applications for new homes fell by 9% in April but remained strong overall, according to data released by the Mortgage Bankers Association (MBA).
MBA's Builder Application Survey found that mortgage applications for new home purchases were up 30.8% year over year but dropped 9% month over month on a seasonally unadjusted basis.
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MBA estimates new single-family home sales were running at a seasonally adjusted annual pace of 770,000 units in April, up 7.8% from the March rate of 714,000 units. On an unadjusted basis, there were 72,000 estimated new home sales in April, unchanged from March.
"While still strong, this sales pace remains below the 877,000-sales pace seen in the second half of 2020," said Joel Kan, MBA's associate vice president of economic and industry forecasting.
By product type, conventional loans made up 72.9% of loan applications, FHA loans composed 15.8%, RHS/USDA loans accounted for 1% and VA loans composed 10.3%. The average loan size of new homes grew from $374,353 in March to $377,434 in April.
"Purchase applications for new homes, unadjusted for typical seasonal patterns, declined in April, but the average loan size increased to its highest level in MBA's survey," Kan said. "The purchase market remains strong overall, but low housing inventory and accelerating home prices have started to adversely impact purchase activity. Additionally, homebuilders have reported significantly higher input prices, which is contributing to the ongoing rise in sales prices and average loan sizes."
