Mortgage applications for new homes purchase in September increased 34.2 percent compared to one year earlier, according to new data from the Mortgage Bankers Association (MBA). Compared to the previous month, however, applications decreased by eight percent.
The MBA estimated new single-family home sales were running at a seasonally adjusted annual rate of 725,000 units in September, a 7.6 percent drop from the August pace of 785,000 units. On an unadjusted basis, the MBA estimated that there were 56,000 new home sales in September 2019, a decrease of 8.2 percent from 61,000 new home sales in August.
The average loan size of new homes declined from $332,497 in August to $330,807 in September. By product type, conventional loans composed 69.2 percent of loan applications, FHA loans composed 18.4 percent, VA loans composed 11.6 percent and RHS/USDA loans composed 0.9 percent.
“Applications for new home purchases fell in September but remained 34.2 percent higher than a year ago, with our estimate for new home sales following a similar pattern,” said Joel Kan, associate vice president of economic and industry forecasting. “Last month’s slowdown was likely caused by ongoing economic and interest rate uncertainty, as well as the fact that homebuilders continue to grapple with high building costs and labor shortages. Purchase applications this year for new and existing homes for sale have consistently outpaced year ago levels. This trend should continue in the final months of the year–especially considering how much higher rates were at the end of 2018.”