The mortgage market was considerably stronger in April than last year at the height of the pandemic, according to the latest monthly report from the Mortgage Bankers Association.
Mortgage applications for new home purchases surged 30.8 percent in April from a year ago, while decreasing 9 percent from a month earlier.
MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 770,000 units in April 2021. The seasonally adjusted estimate for April is an increase of 7.8 percent from the March pace of 714,000 units. On an unadjusted basis, MBA estimates that there were 72,000 new home sales in April 2021, unchanged from March.
By product type, conventional loans composed 72.9 percent of loan applications, FHA loans composed 15.8 percent, RHS/USDA loans composed 1 percent and VA loans composed 10.3 percent.
“Purchase applications for new homes, unadjusted for typical seasonal patterns, declined in April, but the average loan size increased to its highest level in MBA’s survey,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “The purchase market remains strong overall, but low housing inventory and accelerating home prices have started to adversely impact purchase activity. Additionally, homebuilders have reported significantly higher input prices, which is contributing to the ongoing rise in sales prices and average loan sizes.”
The average loan size of new homes increased from $374,353 in March to $377,434 in April.