January New Home Purchase Mortgage Apps Jumped Nearly 19% YOY

The Mortgage Bankers Association's Builder Application Survey reported an 18.9% increase year-over-year in mortgage applications for new home purchases in January. The report also showed a 17% increase in applications on a month-over-month basis.

"These results are consistent with the still-increasing pace of single-family housing starts and permitting activity reported over the last several months," said Joel Kan, MBA's associate vice president of Economic and Industry Forecasting. "The low supply of existing homes on the market, and changing household preferences toward newer, larger homes, continue to spur buyer demand. The MBA's estimate of new home sales has proven to be a reliable leading indicator of the U.S. Census Bureau's monthly new home sales number. The MBA estimates that new home sales increased over 3% in January to a 905,000 seasonally adjusted annual pace, which is the second-highest since our tracking began in 2013, and slightly below October 2020's record pace of 927,000 units."

The MBA uses mortgage application information from the BAS and assumptions regarding market coverage factors to derive its new home sales estimate. The MBA's seasonally-adjusted estimate for January is a 3.3% increase from December's pace of 876,000 units.

Additionally, conventional loans composed 72.6% of loan applications, FHA loans composed 16.2%, RHS/USDA loans composed 0.9% and VA loans composed 10.3%. The average loan size of new homes decreased from $367,502 in December to $363,493 in January.

Click here to read more from the MBA's Builder Application Survey.