January witnessed a 35 percent increase in applications for purchasing new homes when compared to December.
The news does not come as a surprise to Mortgage Bankers Association (MBA) Chief Executive Mike Fratoantoni.
According to Fratantoni, while the sudden increase may seem to be in disagreement with certain data, including the purchase application index of the MBA that shows a poor market for new homes as well as the accessible home sales data of the National Association of Realtors (NAR), the Builder Application Survey (BAS) estimate is in line with the reports relating to the sentiment of home builders demonstrating a strong market for new homes.
At the same time, he notes sluggish sales paces during November and December, prior to the sudden growth of the market for new homes in January.
Mortgage News Daily reports that according to the estimates of the MBA, compared to 492,000 units during December, new houses sold at an occasionally regulated rate of 543,000 units during January. However, the number of new homes sold on an unadjusted basis in January was 38,000 - an increase of 36 percent from the previous month. The figures obtained by the MBA are based on the mortgage application data taken from the BAS, in addition to other factors like conjectures vis-à-vis the market reporting.
The report quotes the MBA, saying that on an unadjusted basis, compared to December, there was an increase of 27 percent in January in the number of applications for mortgage applications for the purchasing new homes. On the basis of the type of product, conventional loans comprised 69.4 percent of all applications for mortgage loans, while FHA loans constituted 15.9 percent. On the other hand, the loans for Rural Housing Service/U.S. Department of Agriculture comprised 1.3 percent and VA loans 13.4 percent.
According to the report, there was a decrease in the average size of loans for new homes from $300,444 in December last year to $289,358 during January.
