MBA: Applications For New Home Purchases Tanked In December

Posted by Patrick Barnard on January 12, 2017 No Comments
Categories : Residential Mortgage

In keeping with the seasonal cycle, applications for mortgages for new home purchases decreased 14% in December compared with November but increased 2% relative to December 2015, according to the Mortgage Bankers Association’s (MBA) Builder Applications Survey.

“Mortgage applications for new single-family homes increased on a year-over-year basis in every month of 2016, with December displaying the thinnest margin over 2015,” says Lynn Fisher, vice president of research and economics for the MBA, in a statement. “However, growth in applications set a high benchmark in December 2015, and it is not yet clear if the recent rise in interest rates is having an impact on applications for new homes. Looking forward to 2017, MBA continues to forecast more than 10 percent growth in single-family housing starts.”

In December, about 67.5% of loan applications for new homes were for conventional loans, while 18.5% were for loans backed by the Federal Housing Administration, about 0.9% were for Rural Housing Service/U.S. Department of Agriculture loans, and about 13.1% were for Veterans Affairs loans.

The average loan size of new homes increased from $329,389 in November to $331,354 in December.

The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 478,000 units in December. That’s a decrease of 18.7% compared with the November pace of about 588,000 units.

On an unadjusted basis, the MBA estimates that there were about 35,000 new home sales in December – a decrease of 14.6% compared with about 41,000 in November.

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