New Home Purchase Mortgage Apps Drop 12% in April

May 18, 2020

The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for April 2020 shows that new-home-purchase mortgage applications decreased 12% year-over-year. Compared to March 2020, applications decreased by 25%. This change does not include any adjustment for typical seasonal patterns.

“New home purchase applications severely weakened in April, which coincided with the peak of the social distancing efforts and restrictions on non-essential activities to help slow the spread of COVID-19,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “MBA estimates that new home sales dropped to an annualized pace of 533,000 units–the slowest since December 2016. This decline was in line with data from our Weekly Applications Survey, which indicated a pullback in March and most of April.”

The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors. The seasonally adjusted estimate for April is a decrease of 23.5% from the March pace of 697,000 units. On an unadjusted basis, MBA estimates that there were 51,000 new home sales in April 2020, a decrease of 28.2% from 71,000 new home sales in March.

“There’s evidence now that unrealized, pent-up demand is being released as states start to re-open,” said Kan. “We expect that heading into the summer, more prospective homebuyers will gradually return to the market.”

By product type, conventional loans composed 62% of loan applications; FHA loans 23.3%, RHS/USDA loans 1.2%. and VA loans 13.5%. The average loan size of new homes decreased from $344,556 in March to $334,641 in April.

About the author

NationalMortgageProfessional.com

Link copied

Published

May 18, 2020

Industry News

Newfi And Addy AI Announce Partnership

Newfi and Addy AI today announced a collaboration focused on the continued evolution of artificial intelligence in mortgage lending

Newfi and Addy AI today announced a collaboration focused on the continued evolution of artificial intelligence in mortgage lending.Newfi has built innovative lending products and a modern approach to the mortgage market. As the industry evolves, the company continues to exp...

Analysis and Data

Mortgage Rates Break 7% Just As Builders Find A Way To Move Buyers

New-home sales rose 6.4% in August as builders cut prices, offered incentives, and sold more lower-priced homes. Now mortgage rates are moving against buyers again

Mortgage rates have officially broken back above 7%, just as builders were showing some success getting buyers across the finish line.The average 30-year fixed mortgage rose to 7.03% for the week ending Sept. 24, up from 6.95% a week earlier and 6.30% a year ago, according t...

Oct

Denver, CO

More from

Industry News

CHLA: More Freddie Mac MBS Buying Could Narrow Mortgage Spreads

Trade group estimates greater Freddie participation could compress spreads another 10 to 12 basis points as Fannie has taken the lead in GSE mortgage-bond buying

Industry News

Sep 23, 2026

Early Loan-Limit Race Splits Into Three Tiers

Lenders are now offering $845,000, $847,440, or $850,000 before FHFA sets the official 2027 limits

Industry News

Sep 23, 2026

Better, Garg Clash Over Claimed 46% Shareholder Support

Better disputes its former CEO’s preliminary consent count as the two sides trade accusations and an Oct. 2 target date approaches

C-Suite Strategies

Sep 23, 2026

Fannie Changes How Rent From A Former Home Counts

Fannie now prohibits leases for departing residences and permits market-analysis tools instead of Form 1007, creating a key documentation difference from Freddie Mac

Regulation and Compliance

Sep 22, 2026

MPF Expands Eligibility For Manufactured And Renovation Loans

The Mortgage Partnership Finance Program has expanded MPF Traditional eligibility for affordable loans, manufactured homes, renovations, and lender-funded assistance

Industry News

Sep 22, 2026