Mortgage applications for new home purchases for February fell by 9 percent for the month – but were 9.2 percent higher than a year earlier, according to a new survey released Tuesday by the Mortgage Bankers Association.
“The economy and job market continue to improve, but new home sales activity slowed in February. Builders continue to be confronted with rising input costs and a lack of available lots, causing them to slow production,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.
MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 748,000 units in February 2021. The seasonally adjusted estimate for February is a decrease of 17.3 percent from the January pace of 905,000 units.
By product type, conventional loans composed 74 percent of loan applications, FHA loans composed 15.4 percent, RHS/USDA loans composed 1.5 percent and VA loans composed 9 percent. The average loan size of new homes increased from $363,493 in January to $370,679 in February.
“The average loan size rose to a record high of over $370,000, and the conventional share of applications also hit a new high, as overall housing inventory levels remain extremely low and are pushing home prices higher,” Kan said.