October saw mortgage applications increase 6% for new homes


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Mortgage applications for the purchase of new homes fell 15.2% year-over-year in October, according to a monthly survey of builders released by the Mortgage Bankers Association this week.

However, month over month activity was actually 6% higher in October than in the previous month. The strong monthly gain puts the MBA estimate of new home sales at its highest pace since January 2021, according to the report.

Joel Kan, associate vice president of economic and industrial forecasting at the MBA, noted in a statement that buying activity in October was dominated by higher mortgage balance transactions, pushing the average amount of new home loans. at over $ 412,000, a record high in the survey.

In September, the average mortgage loan amount for new homes was $ 408,522, according to the survey.

“Recent US census data shows that a growing share of new sales are for homes yet to be built or still under construction, and a declining share for homes completed,” Kan said. “The demand for housing remains strong and buyers are making quick decisions in a still very competitive market. ”

Kan also noted that home builders continue to face delays and challenges related to “supply chain bottlenecks and rising costs.” Persistent shortages of materials and labor have prompted many home builders to delay the listing of newly built homes.

“Overall construction costs, as measured by the Producer Price Index (PPI), registered an annual increase of 12.3% in October, nearly five times the average annual change,” he said. -he adds.

The trade group estimates that sales of new single-family homes were at a seasonally adjusted annual rate of 897,000 units in October 2021, up 6.4% from the pace of 843,000 units in September.

Meanwhile, on an unadjusted basis, the report found that new home sales rose 3% month over month, from 66,000 new home sales in September to 68,000 home sales. new in October.

Regarding the type of product, conventional mortgage loans reigned supreme, representing 75.7% of credit applications. FHA loans represented 13.5% of requests, while Virginia ready and USDA the loans consisted of 10.3% and 0.5% respectively.

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