Spurred by low inventories and rising prices, mortgage applications for new home purchases jumped 9.2 percent in January over the same period last year, according to a survey by the Mortgage Bankers Association’s (MBA).
Compared with December 2016, mortgage applications for new home purchases increased 22 percent, according to MBA’s Builder Application Survey.
“As house prices continue to rise and inventories of homes available for sale remain low, it is not surprising that mortgage applications for new homes in January came in higher than a year ago,” MBA’s Vice President of Research and Economics Lynn Fisher said in a press release.
“Alongside relatively low supply, rising household incomes and favorable demographics should continue to bolster demand for new homes, despite rising interest rates, leading to modest growth in new home sales this year,” she said.
MBA’s survey indicated conventional loans were 67.2 percent of loan applications in January 2016; FHA loans were 18.6 percent; Veteran’s Administration loans comprised 13 percent; and RHS/USDA loans represented 1.1 percent.
The average loan for new homes decreased slightly to $329,806 in January 2017 from $331,354 in December 2016. MBA estimates that sales of new single-family homes rose 17.6 percent in January 2017 to 562,000 units from the 478,000 estimated sales in December 2016.
MBA’s survey tracks application volume from mortgage subsidiaries of home builders. It also extracts information about the types of loans across national, state, and metropolitan areas from the data.