Mortgage applications for new home purchases were up by 4.1% in April from one year ago but were down 11% from March, according to new data from the Mortgage Bankers Association (MBA).
The MBA estimated that new single-family home sales were running at a seasonally adjusted annual rate of 649,000 units in April, down by 2.6% from the 666,000 units recorded in March. On an unadjusted basis, MBA estimated that there were 58,000 new home sales in April, a 10.8% drop from the 65,000 new home sales in March.
The average loan size of new homes declined from $407,015 in March to $401,756 in April. By product type, conventional loans composed 66.2% of loan applications, FHA loans composed 23.4%, VA loans accounted for 10% and RHS/USDA loans occupied 0.4% of the market.
“This was the third straight month of year-over-year growth in applications, which signals improving housing demand for newly built homes at a time when the broader housing market is leaning more on new construction to boost for-sale inventory levels,” said MBA’s Vice President and Deputy Chief Economist Joel Kan. “Mortgage rates have settled in the 6.5% range lately and remain over a percentage point higher than last year. The higher mortgage rate environment continues to factor into homebuying and selling decisions.”
Kan added, “Since the brief pick-up in new home sales in January when mortgage rates dipped, the pace of new home sales has declined for the three consecutive months. With the recently released Census data showing single-family permitting activity on the upswing and housing starts also rising, we expect that to translate to growth in new home sales activity in the second half of the year.”