Mortgage applications for new home purchases in October were up by nine percent from the previous month and up by 31.5 percent from one year ago, according to data from the latest Mortgage Bankers Association (MBA) Builder Applications Survey.
The MBA estimated new single-family home sales at a seasonally adjusted annual rate of 791,000 units in October, a 9.1 percent increase from the September level 725,000 units. On an unadjusted basis, the MBA estimated 61,000 new home sales in October, an 8.9 percent rise from 56,000 new home sales in September. The average loan size of new homes increased from $330,807 in September to $335,235 in October.
By product type, conventional loans composed 67.8 percent of loan applications in October, followed by FHA loans taking a 19.2 percent share, VA loans at 12.3 percent and RHS/USDA loans at 0.7 percent.
“The new home sales market continues to be strong and was reinforced by October’s increase in applications for new home purchases,” said MBA Associate Vice President of Economic and Industry Forecasting Joel Kan. “At an annual pace of 791,000 units, our estimate of new sales has reached its highest level since the inception of our survey in 2012. Home builder sentiment remains close to 18-month highs, and housing starts and permits have increased for four straight months. These are promising signs for the housing market, as the rise in new and existing housing supply has led to slower home-price growth and improving affordability.”