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The Mortgage Bankers Association’s latest Builder Application Survey for April 2021 shows mortgage applications for new home purchases in the U.S. increased 30.8 percent compared from a year ago. Compared to March 2021, applications decreased by 9 percent. This change does not include any adjustment for typical seasonal patterns.
“Purchase applications for new homes, unadjusted for typical seasonal patterns, declined in April, but the average loan size increased to its highest level in MBA’s survey,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “The purchase market remains strong overall, but low housing inventory and accelerating home prices have started to adversely impact purchase activity. Additionally, homebuilders have reported significantly higher input prices, which is contributing to the ongoing rise in sales prices and average loan sizes.”
Added Kan, “Adjusting for these seasonal effects, MBA estimates that new home sales in April rebounded from a two-month slump, increasing 8 percent to an annualized pace of 770,000 units. While still strong, this sales pace remains below the 877,000-sales pace seen in the second half of 2020.”
MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 770,000 units in April 2021, based on data from the BAS. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.
The seasonally adjusted estimate for April is an increase of 7.8 percent from the March pace of 714,000 units. On an unadjusted basis, MBA estimates that there were 72,000 new home sales in April 2021,unchanged from March.
By product type, conventional loans composed 72.9 percent of loan applications, FHA loans composed 15.8 percent, RHS/USDA loans composed 1.0 percent and VA loans composed 10.3 percent. The average loan size of new homes increased from $374,353 in March to $377,434 in April.
MBA’s Builder Application Survey tracks application volume from mortgage subsidiaries of homebuilders across the country. Utilizing this data, as well as data from other sources, MBA is able to provide an early estimate of new home sales volumes at the national, state, and metro level. This data also provides information regarding the types of loans used by new homebuyers. Official new home sales estimates are conducted by the Census Bureau on a monthly basis. In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.