November New Home Purchase Mortgage Applications Decreased 2.2 Percent

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Adam DeSanctis
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WASHINGTON, D.C. (December 16, 2021) - The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for November 2021 shows mortgage applications for new home purchases decreased 2.2 percent compared from a year ago. Compared to October 2021, applications decreased by 3 percent. This change does not include any adjustment for typical seasonal patterns.

"Applications to purchase new homes in November slightly declined on a monthly and annual basis," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "However, the average loan amount increased to a new record of $414,114. A competitive purchase market, combined with increased building materials costs, have been pushing sales prices higher. There also continues to be a shift to the higher end of the market, which is also contributing to the higher loan amounts."  

Added Kan, "New home sales had a strong month with more homebuyers choosing newly built homes. Home sales edged higher over the month to the strongest annual pace since January 2021 at 905,000 units, as limited for-sale inventory has driven more demand to the new home segment. MBA's November estimate for new home sales is the largest for the month since the survey began in 2012."  

MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 905,000 units in November 2021, based on data from the BAS. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.   

The seasonally adjusted estimate for November is an increase of 0.9 percent from the October pace of 897,000 units. On an unadjusted basis, MBA estimates that there were 65,000 new home sales in November 2021, a decrease of 4.4 percent from 68,000 new home sales in October.   

By product type, conventional loans composed 76.3 percent of loan applications, FHA loans composed 13.2 percent, RHS/USDA loans composed 0.5 percent and VA loans composed 10 percent. The average loan size of new homes increased from $412,339 in October to $414,114 in November.  

MBA's Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country. Utilizing this data, as well as data from other sources, MBA is able to provide an early estimate of new home sales volumes at the national, state, and metro level. This data also provides information regarding the types of loans used by new home buyers. Official new home sales estimates are conducted by the Census Bureau on a monthly basis. In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.  

For additional information on MBA's Builder Application Survey, please click here