February New Home Purchase Mortgage Applications Increased 15.7 Percent

WASHINGTON, D.C. (March 19, 2024) – The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for February 2024 shows mortgage applications for new home purchases increased 15.7 percent compared from a year ago. Compared to January 2024, applications increased by 1 percent. This change does not include any adjustment for typical seasonal patterns.

“New home purchase activity in February was slightly hampered by the rise in mortgage rates over the month. However, homebuyers kept up their demand despite how competitive the purchase market still is, driving the level of applications to 16 percent ahead of last year’s pace,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The average loan size increased to its highest level since March 2023 at almost $406,000, but it was still below the record high in MBA’s survey of more than $436,000 in April 2022. The FHA share of purchase applications, which provides a read on first-time homebuyer activity, increased to 25.7 percent, indicating that first-time buyers continue to turn to new homes due to the lack of affordable existing home options. The estimated sales pace of new home sales was 689,000 units, a slight decline from the previous month.”

MBA estimates new single-family home sales, which has consistently been a leading indicator of the U.S. Census Bureau’s New Residential Sales report, is that new single-family home sales were running at a seasonally adjusted annual rate of 689,000 units in February 2024. 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 February is a decrease of 1.6 percent from the January pace of 700,000 units. On an unadjusted basis, MBA estimates that there were 62,000 new home sales in February 2024, a decrease of 1.6 percent from 63,000 new home sales in January. 

By product type, conventional loans composed 63.9 percent of loan applications, FHA loans composed 25.7 percent, RHS/USDA loans composed 0.3 percent and VA loans composed 10.1 percent. The average loan size for new homes increased from $401,282 in January to $405,719 in February.

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.