New-Home Mortgage Applications Jump in March Despite Fewer Sales, MBA ReportsBy Deborah Kearns
In a mixed bag for housing, mortgage applications for new homes jumped in March, while new-construction sales simultaneously fell amid affordability woes, according to the Mortgage Bankers Association (MBA).
Mortgage applications for new-home purchases rose 6.2% in March compared to the same period last year, according to data from the MBA’s Builder Application Survey (BAS). Meanwhile, March saw a 1% bump in new-home loan applications compared to February. Joel Kan, MBA’s vice president and deputy chief economist, noted in a statement that March typically sees a surge in new-home purchases as the busy spring home-selling season gets underway. However, this year, lingering affordability pressures may be sidelining would-be homebuyers. “Applications were still ahead of last year’s pace, but at 6%, the annual growth rate was the slowest since September 2023,” Kan said in a statement. “Homebuyers remain adversely impacted by strong home-price growth and mortgage rates hovering around 7%.” MBA’s estimates for new-home sales in March underscored waning buyer demand. March sales fell 10.7% to a pace of 615,000 units compared to February’s 689,000 units on a seasonally adjusted basis. This marks the slowest new-home sales pace in four months, the MBA found. There were 60,000 new-home sales in March, down 3.2% from 62,000 the month prior. The dismal sales figures and a slowdown in new-home mortgage applications suggest a cooling effect within new construction, which, until now, has bucked the sales slump in resale housing. Conventional loans accounted for 63% of new-home mortgage applications; the FHA loan share of activity was 26.4%; VA loans comprised 10.4%; and USDA loans were a mere 0.3% of activity. Although the average loan size for new homes slipped to $405,400 in March, down a bit from $405,719 the previous month, affordability remains a key concern as mortgage rates remain elevated thanks to stubbornly high inflation readings. For more information, visit https://www.mba.org. Deborah Kearns is a freelance editor and writer with more than 15 years of experience covering real estate, mortgages and personal finance topics. |
Today's Top Stories |