New home sales activity slowed during the month
Mortgage applications for new home purchases fell 16.2% year over year in September, according to data from the Mortgage Bankers Association’s latest Builder Application Survey. Month over month, applications dropped by 4% on an unadjusted basis.
MBA’s estimates show that new single-family home sales were running at a seasonally adjusted annual rate of 843,000 units in September. That is 3.5% below the August pace of 874,000 units. Unadjusted, new home sales decreased from 71,000 to 66,000 month over month.
“New home sales purchase activity was weaker in September, and the average loan size rose to another record high, as homebuilders continue to grapple with rising building materials costs and labor shortages. The survey-high average loan size of $408,522 is evidence of higher sales prices from these higher costs, as well as the shift in new construction to larger, more expensive homes,” said Joel Kan, AVP of economic and industry forecasting at MBA. “The estimated pace of new home sales decreased 3.5% last month after a strong August reading, but the two-month sales pace is at its strongest since January 2021.”
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By product type, conventional loans comprised 75.1% of loan applications, FHA loans 13.9%, RHS/USDA loans 0.5%, and VA loans 10.5%. The average loan size of new homes rose from $406,922 in August to $408,522 in September.
