The Mortgage Bankers Association’s (MBA) Builder Application Survey (BAS) data showed a decrease of 3.5 percent in mortgage applications for new home purchases in January compared with one year earlier.
The month-over-month data, however, showed an increase in applications by 42 percent compared with December 2022. This change does not include any adjustment for typical seasonal patterns.
“Applications for new home purchases increased in January, driven by typical seasonal patterns and lower mortgage rates,” Joel Kan, MBA’s vice president and deputy chief economist, said in a press release. “The 30-year fixed rate declined almost 40 basis points over the month, and this stirred some homebuyers to act, especially those who might have delayed their purchase when mortgage rates were higher. MBA’s estimate of seasonally adjusted new home sales was also up robustly, seeing a 13 percent gain in the sales pace. However, activity was still 12 percent behind last year’s pace, when mortgage rates were over 2 percentage points lower. January was also a strong month for single-family housing completions, according to the U.S. Census Bureau. Homebuilders may have offered additional incentives to sell some of their inventory after last year’s slowdown in sales.”
MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 725,000 units in January, 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 January is an increase of 13.1 percent from the December pace of 641,000 units. On an unadjusted basis, MBA estimates there were 63,000 new home sales in January, an increase of 40 percent from 45,000 new home sales in December.