4% Year-Over-Year Growth On New Home Purchase Applications

Mortgage News May 30, 2023

According to the April 2023 data from the Mortgage Bankers Association (MBA) Builder Application Survey (BAS), mortgage applications for new home purchases experienced a 4.1% rise compared to the previous year. However, when compared to the totals from March 2023, there was an 11% decrease in applications.

Based on data from the MBA’s Builder Application Survey (BAS), the MBA predicts that new single-family home sales in April 2023 were at a seasonally adjusted annual rate of 649,000 units. This estimate is considered a reliable indicator for the U.S. Census Bureau’s New Residential Sales report. This estimate is derived by the MBA through the analysis of mortgage application data from the BAS, alongside considerations of market coverage and other pertinent factors.

In April 2023, the seasonally adjusted estimate shows a 2.6% decline from the pace set in March, which was 666,000 units. The MBA’s unadjusted estimate suggests that there were 58,000 new home sales in April, marking a 10.8% decrease compared to the 65,000 new home sales recorded in March.

In terms of product type, the MBA’s report indicates that conventional loans accounted for 66.2% of loan applications, FHA loans accounted for 23.4%, RHS/USDA loans accounted for 0.4%, and VA loans accounted for 10%. Additionally, the average loan size for new homes saw a decrease from $407,015 in March 2023 to $401,756 in April 2023.

According to the latest report from the National Association of Home Builders (NAHB), the limited supply of existing homes has had a positive impact on builder confidence. The NAHB/Wells Fargo Housing Market Index (HMI) revealed that builder confidence in the market for newly built single-family homes increased by five points in May, reaching a score of 50. This signifies builder confidence increasing for the fifth straight month and reaching the midpoint level of 50, a milestone not achieved since July 2022.

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