The Mortgage Bankers Association (MBA) builder application survey for January showed an increase compared to the applications for last January and for December 2020.
“New home sales activity started 2021 at a strong pace, with purchase mortgage applications for newly constructed homes jumping nearly 19 percent compared to last January,” Joel Kan, MBA associate vice president of economic and industry forecasting, said. “These results are consistent with the still-increasing pace of single-family housing starts and permitting activity reported over the last several months. The low supply of existing homes on the market, and changing household preferences toward newer, larger homes, continue to spur buyer demand.
“MBA’s estimate of new home sales has proven to be a reliable leading indicator of the U.S. Census Bureau’s monthly new home sales number,” Kan continued. “MBA estimates that new home sales increased over three percent in January to a 905,000 seasonally adjusted annual pace, which is the second-highest since our tracking began in 2013, and slightly below October 2020’s record pace of 927,000 units.”
Conventional loans accounted for 72.6 percent of loan applications, FHA loans 16.2 percent, RHA/USDA loans 0.9 percent, and VA loans 10.3 percent. The survey also showed the average loan size decreased from December to January ($367,502 to $363,493 respectively).