New Home Purchase Mortgage Applications Up Nearly 40 Percent

New Home Purchase Mortgage Applications Up Nearly 40 Percent

January 16, 2020
Photo credit: Getty Images/ktsimage
The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for December 2019 shows.
Mortgage applications for new home purchases recorded a 38.7 percent year-over-year spike in December, according to new data from the Mortgage Bankers Association (MBA). Compared to the previous month, however, applications decreased by five percent.
The MBA estimated new single-family home sales were running at a seasonally-adjusted annual rate of 689,000 units in December, a scant 0.1 percent increase from November’s 688,000 units. On an unadjusted basis, the MBA estimated there were 48,000 new home sales in December 2019, which is percent below the 51,000 new home sales in November.
The average loan size of new homes increased from $337,943 in November to $338,625 in December. By product type, conventional loans composed 68.7 percent of loan applications, FHA loans composed 18.4 percent, VA loans composed 12.1 percent and RHS/USDA loans composed 0.8 percent.
“The sizeable year-over-year increase in new home purchase activity in December capped off what was a strong 2019 overall,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Our seasonally-adjusted estimate of December new home sales was virtually unchanged from November, forecasted at an annual pace of 689,000 units. The housing market is seeing signs of a more significant recovery in new residential construction, which is a promising sign for prospective homebuyers. Even though supply continues to lag, we expect to see another year of gradual growth in new home sales, supported by rising household formation and the healthy job market.”
Separately, Freddie Mac reported the 30-year fixed-rate mortgage averaged 3.65 percent for the week ending Jan. 16, up slightly from last week when it averaged 3.64 percent. The 15-year fixed-rate mortgage averaged 3.09 percent, up slightly from last week when it averaged 3.07 percent. And the five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.39 percent, up from last week when it averaged 3.30 percent.