Applications for new home purchases increased an impressive 22% in January compared with December and increased 9.2% relative to January 2016, according to the Mortgage Bankers Association’s (MBA) Builder Application Survey (BAS).
The change does not include any adjustment for typical seasonal patterns.
“As house prices continue to rise and inventories of homes available for sale remain low, it is not surprising that mortgage applications for new homes in January came in higher than a year ago,” says Lynn Fisher, vice president of research and economics for the MBA, in a release. “Alongside relatively low supply, rising household incomes and favorable demographics should continue to bolster demand for new homes, despite rising interest rates, leading to modest growth in new home sales this year.”
By product type, conventional loans composed 67.2% of loan applications, Federal Housing Administration loans composed 18.6 percent, Rural Housing Service/U.S. Department of Agriculture loans composed 1.1% and Veterans Affairs loans composed 13%.
The average loan size of a new home was $329,806, down from $331,354 in December.
The MBA estimates that, as of the end of January, new single-family home sales were running at a seasonally adjusted annual rate of about 562,000 units. That’s an increase of 17.6% compared with about 478,000 units in December.
On an unadjusted basis, the MBA estimates that there were 44,000 new home sales in January, a increase of 25.7% compared with about 35,000 in December.