The Mortgage Bankers Association’s (MBA) Builder Application Survey (BAS) data for April showed mortgage applications for new home purchases increased 4.1 percent compared with one year prior. Compared with one month prior, applications decreased by 10.8 percent, however this change does not include any adjustment for typical seasonal patterns. The seasonally adjusted estimate for April is a decrease of 2.6 percent from March.
“Purchase applications for newly constructed homes declined in April but were up 4 percent compared to a year ago,” Joel Kan, MBA’s vice president and deputy chief economist, said. “This was the third straight month of year-over-year growth in applications, which signals improving housing demand for newly built homes at a time when the broader housing market is leaning more on new construction to boost for-sale inventory levels. Mortgage rates have settled in the 6.5 percent range lately and remain over a percentage point higher than last year. The higher mortgage rate environment continues to factor into homebuying and selling decisions.”
MBA estimates new single-family home sales, which have consistently been a leading indicator of the U.S. Census Bureau’s New Residential Sales report, were running at a seasonally adjusted annual rate of 649,000 units in April 2023, based on data from the BAS.
“Since the brief pick-up in new home sales in January when mortgage rates dipped, the pace of new home sales has declined for the three consecutive months,” Kan added. “With the recently released census data showing single-family permitting activity on the upswing and housing starts also rising, we expect that to translate to growth in new home sales activity in the second half of the year.”