Mortgage applications for new home purchases rose 2% year over year in December, the Mortgage Bankers Association reported.
Conventional loans made up 67.5% of these applications, with FHA and VA loans composing 18.5% and 13.1%, respectively, the MBA said Thursday based on data from its Builder Applications Survey. The average loan size of new homes also increased to $331,354 from $329,389 in November.
While applications rose year over year, they declined 14% from November, not accounting for seasonality. Similarly, new home sales declined by 18.7% from November to a seasonally adjusted annual rate of 478,000 units, the MBA estimated.
December’s margin over a year ago was the thinnest of any month in 2016, according to Lynn Fisher, MBA vice president of research and economics. But that doesn’t necessarily reflect the impact of higher interest rates.
“Growth in applications set a high benchmark in December 2015, and it is not yet clear if the recent rise in interest rates is having an impact on applications for new homes,” Fisher said in a news release “Looking forward to 2017, MBA continues to forecast more than 10% growth in single-family housing starts.”