Mortgage applications for new home purchases decreased 5% compared to a year ago, according to the Mortgage Bankers Association’s (MBA) March 2022 Builder Application Survey (BAS). Compared to February 2022, applications increased by 10%. This change does not include any adjustment for typical seasonal patterns, as buying generally picks up in spring.
Key facts:
- MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 752,000 units in March 2022, based on data from the BAS.
- The seasonally adjusted estimate for March is a decrease of 4.9% from the February pace of 791,000 units.
- On an unadjusted basis, MBA estimates that there were 74,000 new home sales in March 2022, an increase of 12.1% from 66,000 new home sales in February.
- Breakdown by product type:
-
- Conventional loans composed 76.6% of loan applications
- FHA loans composed 13.0%
- RHS/USDA loans composed 0.2%
- VA loans composed 10.2%
- The average loan size of new homes increased from $432,359 in February to $436,151 in March.
The takeaway:
“Mortgage applications for new home purchases increased in March, which is consistent with typical seasonal trends and a sign of the strong underlying demand for housing,” said Joel Kan, MBA’s associate vice president of Economic and Industry Forecasting. “Potential buyers have increasingly looked to new homes as an option, given the lack of existing homes for sale. The average loan size continued to set record highs and reached $436,151. Growth in applications for larger loans continued to dominate application activity.”
Added Kan, “MBA’s estimate of new home sales declined for the fourth consecutive month, with activity down 5% compared to February. Elevated home prices, rapidly increasing mortgage rates, and higher costs and supply shortages for building materials are all affecting sales growth.”
Click here to read the full report.
