New Home Purchase Apps Fell More Than 16 Percent In September 2021

New home purchase apps also declined by 4% month-over-month from Aug. 2021 to Sept. 2021.

“New home sales purchase activity was weaker in September, and the average loan size rose to another record high, as homebuilders continue to grapple with rising building materials costs and labor shortages. The survey-high average loan size of $408,522 is evidence of higher sales prices from these higher costs, as well as the shift in new construction to larger, more expensive homes,” said Joel Kan, MBA's associate vice president of Economic and Industry Forecasting. “The estimated pace of new home sales decreased 3.5% last month after a strong August reading, but the two-month sales pace is at its strongest since January 2021.”

According to the MBA's estimate, single-family home sales were running at a seasonally adjusted annual rate of 843,000 units in Sept. 2021. The new home sales estimate is generated by mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.   

The seasonally adjusted estimate for Sept. is a 3.5% decline from the Aug. pace of 874,000 units. On an unadjusted basis, the MBA estimates that there were 66,000 new home sales in Sept. 2021, down 7% from 71,000 new home sales in Aug. 

Meanwhile, conventional loans composed 75.1% of loan applications, FHA loans composed 13.9%, RHS/USDA loans composed 0.5%, and VA loans composed 10.5%. The average loan size of new homes increased from $406,922 in Aug. to $408,522 in Sept.