The Mortgage Bankers Association (MBA) says applications for new home
purchases suffered a significant downturn in November
but remain well above the
level of activity at the same time in 2019.
MBA’s Builder Application Survey
(BAS) shows a 16 percent decline in applications from October to November. This
does not include any seasonal adjustment. Applications were up 34.7 compared to
November 2019.

Based on the applications and other data, MBA estimates new single-family
home sales were running at a seasonally adjusted annual rate of 827,000 units during
the month, a decrease of 10.8 percent from the October pace of 927,000 units.
On an unadjusted basis, MBA estimates that there were 59,000 new home sales in
November 2020, down 15.7 percent from 70,000 sales in October.   

“November new home sales activity, both mortgage applications and home
sales, ran at a pace considerably ahead of 2019, showing the ongoing strong
growth in housing demand and new residential construction,” said Joel Kan,
MBA’s Associate Vice President of Economic and Industry Forecasting.
“However, MBA estimates that after climbing to a new survey high in
October, the seasonally adjusted pace of new home sales declined in November.
Signs of a slowdown in the economic recovery
likely contributed to the expected
monthly decrease in activity.”    

Conventional loans accounted for 71.8 percent of loan applications and FHA
loans for 16.8 percent. Just under 1 percent of applications were for RHS/USDA and
VA loans had a 10.4 percent share. The average loan size of new homes increased
from $355,684 in October to $357,554 in November.

MBA’s Builder Application Survey tracks application volume from mortgage
subsidiaries of home builders across the country. Utilizing this data, as well
as data from other sources, MBA provides an early estimate of new home sales
volumes at the national, state, and metro level. Official reports of new home
sales are provided monthly by the U.S. Census Bureau and the Department of Housing
and Urban Development. In that data, new home sales are recorded at contract
signing, which is typically coincident with the mortgage application. The report
on November new home sales will be released on December 23.

By Jann Swanson , dated 2020-12-16 10:09:33

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Courtesy of Mortgage News Daily

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