Applications for New Home Purchases Up in January

Mortgage applications for new home purchases in January increased 18.4 percent from one year earlier, according to the latest the Mortgage Bankers Association (MBA) Builder Application Survey. Compared to December 2017, applications increased by 34 percent.

The MBA estimated new single-family home sales were running at a seasonally adjusted annual rate of 700,000 units in January, up 26.4 percent from the December pace of 554,000 units. On an unadjusted basis, the MBA estimates that there were 54,000 new home sales in January, an increase of 35 percent from 40,000 new home sales in December. Conventional loans composed 71.7 percent of loan applications in January, with FHA loans accounting for 15.3 percent and VA loans 11.7 percent. The average loan size of new homes decreased from $339,203 in December to $338,918 in January.

“Mortgage applications for new homes surged in January and were up 18 percent on a year over year basis,” said Lynn Fisher, MBA vice president of research and economics. “This complements other positive news on U.S. job growth suggesting that economic fundamentals are strong. Based on applications, we estimate that new home sales were running at a pace of 700,000 on a seasonally adjusted annual basis, the highest such estimate in our survey which began in 2013.”