Number of single-family home sales also rises
Mortgage applications for new home purchases went up by 16.6% in May compared to a year ago and increased by 8% from the previous month, according to data from the Mortgage Bankers Association (MBA).
Its latest Builder Application Survey also showed that new single-family home sales were running at a seasonally adjusted annual rate of 755,000 units in May – an increase of 16.3% from April’s 649,000 units.
By product type, MBA said conventional loans composed a third, or 67%, of loan applications, while FHA loans accounted for more than a fifth, or 22.8%.
Meanwhile, the average loan size of new homes increased from $401,756 in April to $403,581 in May.
“Purchase activity for newly built homes was strong in May, with builders continuing to bring homes to the market and buyers keen to act on available units,” Joel Kan (pictured), vice president and deputy chief economist at the Mortgage Bankers Association, commented on the results of the Builder Application Survey for May 2023.
“Applications for purchase loans were up on a monthly basis and increased annually for the fourth consecutive month. Our estimate of new home sales also jumped in May, up 16% to the fastest pace of new home sales in 15 months.”
Kan added that the new home sales segment continued to gather momentum, growing at a pace of 5% compared to a year ago, while existing-home sales continued to experience annual declines of more than 20% – results that were also broadly in line with census data showing an uptick in residential housing starts and permitting in recent months.
MBA’s Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country, providing an early estimate of new home sales volumes at the national, state, and metro level, as well as information regarding the types of loans used by new home buyers.
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