More borrowers have been applying for mortgages to buy new homes than a year ago, according to the Mortgage Bankers Association (MBA).
Mortgage applications for purchases of new homes were up nearly 9% year over year in December, MBA reported.
The inventory of starter homes among the existing stock “remains tight,” and “first-time homebuyers remained active in the new home segment,” said Joel Kan, MBA’s vice president and deputy chief economist.
By product type, conventional loans composed 60% of loan applications; and Federal Housing Administration, 29%; Veterans Affairs, 10%; and RHS/USDA loans composed 0.5%.
The average loan size for new homes decreased to $400,930 in December from $402,873 in November, according to MBA.
As expected, however, the pace of new-home sales declined in December compared to the November pace, following the normal seasonal slowdown in December. Mortgage applications for new home sales declined by 3% over the month.
The annual seasonally adjusted pace of new-home sales was 601,000 in December, down nearly 16% from the November pace of 713,000 units.
On an unadjusted basis, MBA estimates 46,000 new home sales in December, a decrease of 6% from 49,000 in November.
