Applications for new home purchases fell more than 22%, on an unadjusted basis, in November compared to December, according to the Mortgage Bankers Association's (MBA) Builder Application Survey (BAS).
The MBA reports that there were approximately 28,000 new home sales in November compared to about 36,000 in October.
‘Following strong new home sales in October, our data shows November sales volume dropped significantly,’ says Mike Fratantoni, chief economist for the MBA, in a statement. ‘Average loan size increased to almost $307,000 in November from roughly $300,000 in October, indicating that builders are having greater success with higher-priced homes and difficulty at the entry level, as first-time buyers continued to face tight credit conditions.’
By product type, conventional loans comprised 69.3% of loan applications, Federal Housing Administration loans comprised 15.8%, Rural Housing Service/U.S. Department of Agriculture loans comprised 0.9% and Veterans Affairs loans comprised 14%.
The average loan size of new homes increased from $300,289 in October to $306,975 in November.
The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 401,000 units in November. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.Â
The MBA is forecasting that new home sales for November will represent a decrease of 13% compared to the October pace of 461,000 units.