New Home Purchase Mortgage Application Up 6.2%

WRE News April 17, 2024


New Home Purchase Mortgage Application Up 6.2%

Mortgage applications for new home purchases in March were 6.2% higher than one year earlier, according to data from the Mortgage Bankers Association (MBA). On a monthly measurement, applications increased by 1% from February.

MBA estimated new single-family home sales were running at a seasonally adjusted annual rate of 615,000 units in March, down 10.7% from the February pace of 689,000 units.  On an unadjusted basis, MBA estimated that there were 60,000 new home sales last month, down 3.2% from 62,000 new home sales in February.

The average loan size for new homes decreased from $405,719 in February to $405,400 in March. By product type, conventional loans composed 6% percent of loan applications, FHA loans composed 26.4%, VA loans composed 10.4% and RHS/USDA loans composed 0.3%.

“March is typically a month when new home purchases see a seasonal boost, but this year March applications for new home purchases saw less than a 1% increase over the prior month on an unadjusted basis,” said Joel Kan, MBA’s vice president and deputy chief economist. “Applications were still ahead of last year’s pace, but at 6%, the annual growth rate was the slowest since September 2023. Homebuyers remain adversely impacted by strong home-price growth and mortgage rates hovering around 7%.”

Kan added that the “FHA share of applications did increase in March, exceeding 26% compared to a 24% average for the prior 12 months. A higher FHA share can be a sign of more first-time buyer activity, but that segment of buyers is also more sensitive to affordability challenges.”

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