MBA: New-Home Mortgage Applications Decreased 25.2% YOY in November

According to the Builder Application Survey, the average loan size of new homes decreased from $400,616 in October to $392,465 in November.

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Compared with a year ago, new-home mortgage applications decreased 25.2% in November, according to the Mortgage Bankers Association (MBA) Builder Application Survey (BAS). Applications increased by 1% compared with October, and the change does not include any adjustment.

“New-home purchase applications recovered slightly in November, as mortgage rates retreated from their October highs and brought some prospective buyers back into a market that still faces affordability challenges,” says Joel Kan, MBA’s vice president and deputy chief economist.

“Similarly, estimated new-home sales for November saw an annual pace of 660,000 units—a 10% increase from October. While mortgage rates remain high compared with the past few years, the 30-year fixed rate was 6.49% at the end of November after reaching 7.16% in mid-October, providing a slight boost in purchasing power for buyers. However, both applications and sales remained over 20% below last year’s pace.”

The new-home sales estimate uses mortgage application information from the BAS and assumptions regarding market coverage and other factors. For November, the seasonally adjusted estimate is an increase of 10.4% from the October pace of 598,000 units. MBA estimates that there were 49,000 new-home sales in November on an unadjusted basis, an increase of 4.3% from the 47,000 October new-home sales.

“Reflecting the slowdown at the upper end of the market, the average loan size on new-home purchase applications was $392,465, the lowest since June 2021,” Kan adds. By product type, conventional loans composed 67.6% of loan applications; FHA loans, 21.3%; RHS/USDA loans, 0.2%; and VA loans, 10.9%.

MBA’s BAS tracks application volume from mortgage subsidiaries of home builders across the country. MBA can provide an early estimate of new-home sales volumes at the national, state, and metro level by using this data in addition to other sources.

About the Author

Leah Draffen

Leah Draffen is an associate editor at Builder. She earned a B.A. in journalism and minors in business administration and sociology from Louisiana State University.

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