WASHINGTON – Mortgage applications for new home purchases increased 6.2% in March compared to a year ago and 1% compared to a month ago, according to the Mortgage Bankers Association’s Builder Application Survey (BAS). The change does not include any adjustment for typical seasonal patterns.
The monthly increase underscores the impact higher home prices and mortgage rates continue to have on buyers, Joel Kan, MBA’s vice president and deputy chief economist, said.
“March is typically a month when new home purchases see a seasonal boost, but this year March applications for new home purchases saw less than a one percent increase over the prior month on an unadjusted basis,” he said. “Applications were still ahead of last year’s pace, but at 6 percent, the annual growth rate was the slowest since September 2023.
Kan said the FHA share of applications increased in March – exceeding 26% compared to a 24% average for the prior 12 months.
“A higher FHA share can be a sign of more first-time buyer activity, but that segment of buyers is also more sensitive to affordability challenges,” he said.
Added Kan, “MBA’s estimate of new home sales fell more than 10% over the month to a seasonally adjusted pace of 615,000 units, the slowest annual pace in four months.”
MBA estimates new single-family home sales, which has consistently been a leading indicator of the U.S. Census Bureau’s New Residential Sales report, is that new single-family home sales were running at a seasonally adjusted annual rate of 615,000 units in March 2024. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.
The seasonally adjusted estimate for March is a decrease of 10.7% from the February pace of 689,000 units. On an unadjusted basis, MBA estimates that there were 60,000 new home sales in March 2024, a decrease of 3.2% from 62,000 new home sales in February.
By product type, conventional loans composed 63.0% of loan applications, FHA loans composed 26.4%, RHS/USDA loans composed 0.3% and VA loans composed 10.4%. The average loan size for new homes decreased from $405,719 in February to $405,400 in March.
MBA’s Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country. Utilizing this data, as well as data from other sources, MBA is able to provide an early estimate of new home sales volumes at the national, state, and metro level. This data also provides information regarding the types of loans used by new home buyers. Official new home sales estimates are conducted by the Census Bureau on a monthly basis. In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.
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