Applications for new-home purchases increased by nearly a third in January compared to the month prior, according to data from the Mortgage Bankers Association.
The MBA-administered Builder Application Survey showed that mortgage applications for new homes climbed 29% in January relative to December, not accounting for seasonal adjustments.
New-home sales, as estimated by the Washington-based association, hit a seasonally adjusted rate of 530,000 units in January, a marked 29.6% improvement from December’s rate of 409,000. The MBA uses mortgage application data from its survey along with assumptions about market coverage to derive new single-family home sales estimates.
While the rate of sales picked up pace month-to-month, the average loan size of new homes decreased to $304,364 in January from $311,398 the month before, according to the MBA.
The improving jobs market and low interest rates helped contribute to the health of January’s new-home sales, MBA Vice President of Research and Economics Lynn Fisher said in a Feb. 12 press release.
As for the breakdown of mortgage product types, conventional loans again represented a majority of loan applications with 67.2%. Federal Housing Administration loans made up 18.2% of the total, while Veteran Affairs loans and RHS/USDA loans contributed 13.4% and 1.1%, respectively.