Mortgage applications for a new home down 10.6% year-on-year in April

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Mortgage applications for new home purchases in April were down 10.6% from a year ago, according to the Mortgage Bankers Association’s (MBA) latest construction application survey (BAS). Compared to March, requests are down 14%.

“New home buying activity declined on a monthly and annual basis in April as soaring mortgage rates dampened demand and homebuilders continued to grapple with rising costs, supply chain issues and extended completion times,” says MBA Partner Joel Kan. vice president of economic and industrial forecasts. “With the supply of existing homes on the market still at extremely low levels, the new home market is an important source of housing supply. However, the pace of construction has slowed in recent months. MBA’s estimate of new home sales fell for the fifth straight month to 701,000 units, the slowest pace of sales since May 2020.”

The MBA estimates that sales of new single-family homes proceeded at a seasonally adjusted annual rate of 701,000 units in April, down 6.8% from March’s pace of 752,000 units. On an unadjusted basis, the MBA estimates there were 65,000 new home sales in April, down 12.2% from 74,000 new home sales in March.

By product type, conventional loans accounted for 76.7% of loan applications, FHA loans 13.1%, RHS/USDA loans 0.2%, and VA loans 10.1%. The average loan amount for new homes rose from $436,151 in March to $436,576 in April.

“The average loan size increased to a new high of $436,576, and more than half of the applications were for loan amounts over $400,000,” Kan adds. of the market. »

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