Applications for new home purchases decreased 7% in September compared with August but increased 3% compared with September 2015, according to the Mortgage Bankers Association’s (MBA) Builder Application Survey.
“After a strong start in 2016 and despite evidence of increasing costs, mortgage applications for new homes have maintained a pace modestly above 2015 rates,” said Lynn Fisher, vice president of research and economics for the MBA, in a statement. “The monthly decline in mortgage applications in September is largely attributable to typical declines in building activity this time of year. That said, builders are facing headwinds from rising labor costs. Looking forward, year-over-year growth in applications is likely to remain muted for the balance of 2016.”
About 68.8% of applications for new homes in September were for conventional loans. About 17.5% were for loans backed by the Federal Housing Administration; about 12.7% were for Veterans Affairs loans; and about 0.9% were for Rural Housing Service/U.S. Department of Agriculture loans.
The average loan size for a new home was $326,998 in September – up from $325,224 in August.
The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 593,000 units in September. This seasonally adjusted estimate represents a decrease of 1.3% compared with the August pace of about 601,000 units.
On an unadjusted basis, the MBA estimates that there were about 44,000 new home sales in September – a decrease of 8.3% from about 48,000 in August.