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The Mortgage Bankers Association's Builder Application Survey reported a 7% year-over-year increase in mortgage applications for new home purchases for March 2021. Month-over-month, applications increased by 12%, according to the report.
"New home purchase application activity is typically strong in March, and this year did not disappoint. Applications strongly increased on a monthly and annual basis," said Joel Kan, MBA's associate vice president of Economic and Industry Forecasting. "However, MBA's estimate of new home sales declined by more than 4% last month, as we continue to see increasing home prices and a low number of homes on the market, caused in part by increased challenges facing home builders. Supply chain delays have led to more expensive building materials and delayed deliveries, and these have made it more difficult for builders to keep up with the strong demand for buying a home seen in most of the country this spring. With home-price appreciation remaining elevated in many markets, the average loan size for a new home purchase reached $374,000 in March, the highest in our survey."
The MBA estimates new single-family home sales were running at a seasonally adjusted pace of 714,000 units in March 2021, according to the BAS. Meanwhile, the seasonally adjusted estimate for March is a decrease of 4.5% from the February pace of 748,000 units, according to the report.
The MBA reports that conventional loans composed 70.9% of loan applications, FHA loans composed 14.8%, RHS/USDA loans composed 4.4% and VA loans composed 9.9%.
Click here to read more from the MBA's BAS.