It was a November to remember when it came to mortgage applications for new home purchases, according to the Mortgage Bankers Association (MBA) Builder Application Survey.
Last month, the MBA found mortgage applications for new home purchases increased 27.1 percent compared from one year ago, although applications decreased by 17 percent from October. The trade group estimated new single-family home sales were running at a seasonally adjusted annual rate of 688,000 units in November, down 13 percent from the October pace of 791,000 units. On an unadjusted basis, the MBA estimated that there were 51,000 new home sales in November 2019, a decrease of 16.4 percent from 61,000 new home sales in October.
During November, the average loan size of new homes increased to $337,943, up from $335,235 in October to $337,943. By product type, conventional loans composed 69.2 percent of loan applications, FHA loans composed 18.0 percent, VA loans composed 12.2 percent and RHS/USDA loans composed 0.6 percent.
“Applications for new home purchases continue to outperform last year’s pace, and November was no different. Activity last month was 27 percent higher than November 2018,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “On a seasonally-adjusted monthly basis, new applications decreased to the slowest pace since June 2019, which points to some weakness as this year comes to an end. The healthy job market, increased new home construction, and rising household formation support growth heading into 2020, but affordability challenges in many markets and economic uncertainty pose as headwinds.”