New Home Purchase Mortgage Applications Surged in March

Mortgage applications for new home purchases during March was up 5.5% year-over-year and up 14% month-over-month, according to data from the Mortgage Bankers Association.

MBA estimated new single-family home sales were running at a seasonally adjusted annual rate of 629,000 units in March, down 0.8% from the February pace of 634,000 units. On an unadjusted basis, MBA estimated there were 61,000 new home sales last month, up 7% from 57,000 new home sales in February.

The average loan size for new homes decreased from $397,516 in February to $381,921 in March. By product type, conventional loans composed 49% of loan applications, FHA loans composed 37%, VA loans composed 13% and RHS/USDA loans composed 0.9%.

“Applications for new home purchases increased in March, consistent with typical seasonal patterns and supported by mortgage rates that had been drifting lower,” said Joel Kan, MBA’s vice president and deputy chief economist. “The growing inventory of newly built, move-in ready homes supported homebuyer interest over the month, pushing the index higher than last year’s levels. Our estimate of seasonally adjusted new home sales saw a slight decline in March but were stronger than last year’s pace of sales.”