January New-Home Purchase Mortgage Applications See Double-Digit Decrease — RISMedia

The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for January 2022 shows that mortgage applications for new-home purchases decreased by 12.5% versus a year ago. Compared to December 2021, however, applications increased by 10%. This change does not include adjustments for typical seasonal patterns.

Key findings:

MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 821,000 units in January 2022. This is a decrease of 7.4% from the rate of 887,000 units in December 2021. On an unadjusted basis, MBA estimates that there were 66,000 new home sales in January, an increase of 10% from 60,000 new home sales in December.

The average loan size of new homes increased from $423,102 in December to $426,954 in January. By product type, loan applications broke down as:

Conventional loans: 77%
FHA loans: 13%
VA loans: 9.5%
RHS/USDA loans: 0.5%

The takeaway:

“While homebuyer demand remains strong, purchase activity is being constrained by higher prices and building delays due to supply-chain pressures and building materials shortages,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “MBA’s estimate of new-home sales fell in January to its slowest annual pace since July 2021. Purchase activity for new homes continues to be concentrated in the higher end of the market and overall sales prices continue to increase.”

For additional information on MBA’s Builder Application Survey, please click here.


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