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The Mortgage Bankers Association's Builder Application Survey reported a 30.8%, year-over-year increase in new home purchase applications for April 2021. This is a major increase compared to March 2021 when applications decreased by 9%.
"Purchase applications for new homes, unadjusted for typical seasonal patterns, declined in April, but the average loan size increased to its highest level in MBA's survey," said Joel Kan, MBA's associate vice president of Economic and Industry Forecasting. "The purchase market remains strong overall, but low housing inventory and accelerating home prices have started to adversely impact purchase activity. Additionally, homebuilders have reported significantly higher input prices, which is contributing to the ongoing rise in sales prices and average loan sizes."
"Adjusting for these seasonal effects, MBA estimates that new home sales in April rebounded from a two-month slump, increasing 8% to an annualized pace of 770,000 units. While still strong, this sales pace remains below the 877,000-sales pace seen in the second half of 2020," added Kan.
On an unadjusted basis, the MBA estimates that there were 72,000 new home sales in April 2021, unchanged from March. By product type, conventional loans composed 72.9% of loan applications, FHA loans composed 15.8%, RHS/USDA loans composed 1.0% and VA loans composed 10.3%, according to the report. The average loan size of new homes increased from $374,353 in March to $377,434 in April.
Click here to read more from the MBA's BAS.