Mortgage Applications for New Home Purchases Down in April

Mortgage applications for new home purchases during April dropped by 4.3 percent from one year earlier and plummeted by 20 percent from one month prior, according to the latest Mortgage Bankers Association (MBA) Builder Applications Survey data.

 

The MBA estimated new single-family home sales were running at a seasonally adjusted annual rate of 517,000 units in April, a 22.8 percent drop from the March pace of 670,000 units. On an unadjusted basis, the MBA estimated that there were 50,000 new home sales in April, a decrease of 19.4 percent from 62,000 new home sales in March. The average loan size of new homes decreased from $328,192 in March to $326,284 in April.

 

“For the first time this year, mortgage applications for new homes in April were lower than the same month a year ago. Mortgage applications for new homes fell more than 20 percent in April after peaking in March, as they have the past two years,” said Lynn Fisher, MBA’s vice president of research and economics. “A relatively strong March may have pulled forward some applications from April, exacerbating the normal seasonal fall-off. On net, year to date applications for new homes are running about three percent above the same period from 2016. Despite steady demand for housing, homebuilders continue to face rising costs for labor and materials which will continue to moderate the pace of building.”

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