Mortgage applications fell 15.2% year over year in October
Mortgage applications for the purchase of new homes fell 15.2% in October from a year ago, according to the latest Mortgage Bankers Association (MBA) Builders’ Applications Survey (BAS). Despite year-over-year declines, claims were up 6% from September.
âThe strong monthly increase puts the MBA estimate of new home sales at its highest pace since January 2021,â said Joel Kan, associate vice president of economic and industrial forecasting at MBA. âBuying activity continues to be dominated by higher loan balance transactions, which has pushed the average new home loan amount to over $ 412,000, another new record in the survey. Recent US census data shows that a growing share of new sales are for homes under construction or under construction, and a declining share for homes completed.
The MBA estimates that sales of new single-family homes were operating at a seasonally adjusted annual rate of 897,000 units in October, an increase of 6.4% from the estimated pace in September.
âHome builders continue to face delays and challenges related to supply chain bottlenecks and rising costs,â Kan said. âOverall construction costs, as measured by the Producer Price Index (PPI), registered an annual increase of 12.3% in October, which is almost five times the average annual change.
Conventional loans represented 75.7% of loan applications, FHA loans represented 13.5%, RHS / USDA loans represented 0.5%, and VA loans represented 10.3%. The average loan size for new homes rose to $ 412,399 in October, from $ 408,522 in September.