The Mortgage Bankers Association (MBA) reported a significant surge in mortgage applications for new home purchases in January, indicating a bright spot in the housing market. According to the MBA's Builder Application Survey (BAS) for January 2024, there was a 19.1% increase in mortgage applications for new homes compared to the same month last year, and a remarkable 38% jump from December 2023, showcasing the growing appeal of newly constructed homes among buyers.
“Applications for new home purchases were strong in January, as newly built homes remained an attractive option for prospective homebuyers who looked to take advantage of lower mortgage rates during the month,” MBA’s Vice President and Deputy Chief Economist Joel Kan said. “Applications were up 19 percent from a year ago – the 12th consecutive annual increase – and the non-seasonally adjusted index was the strongest January reading in the survey’s history. The seasonally adjusted annualized pace of new home sales was 700,000 units, the highest sales pace since October 2023.”
The MBA’s analysis suggests that the seasonally adjusted annual rate of new single-family home sales in January 2024 was 700,000 units, a significant 16.9% rise from the December 2023 pace of 599,000 units. On an unadjusted basis, the MBA estimates there were 63,000 new home sales in January 2024, which is a 37% increase from the 46,000 new home sales recorded in December.
The breakdown of loan types for new home purchases showed that conventional loans made up 64.5% of applications, FHA loans accounted for 24.8%, VA loans for 10.3%, and RHS/USDA loans for a minimal 0.4%. Additionally, the average loan size for new homes saw a slight decrease from $405,368 in December to $401,282 in January.
