Mortgage applications for new homes stalled in January, dipping by 12.5% year-over-year, according to a Mortgage Bankers Association’s survey published this week.
The trade group noted that the survey results showed the slowest annual pace since July 2021.
However, from December 2021 to January, purchase applications grew, with a 10% month-over-month gain recorded by MBA’s survey. On an unadjusted basis, the MBA estimates there were 66,000 new home sales in January 2022, an increase from 60,000 new home sales recorded in December.
Joel Kan, associate vice president of economic and industry forecasting at the MBA, said in a statement that building delays continue to impact the emergence of additional housing supply.
“While homebuyer demand remains strong, purchase activity is being constrained by higher prices and building delays due to supply-chain pressures and building materials shortages,” Kan said.
He also noted that purchase activity for new homes continues to be concentrated in the higher end of the market and that sales prices are continuing to grow with the average loan size coming in at $427,000 in January, another record.
The average loan size for new homes in December was $423,102, the trade group noted.
Throughout 2021, there were an estimated 1,595,100 housing starts, a 15.6% increase from 2020, a report released last month by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau said.
Per the MBA report, new single-family home sales slumped in January, with a seasonally adjusted annual rate of 821,000 units, a 7.4% decrease from the month prior. In December, home sales were at a seasonally adjusted annual rate of 887,000 units, the report said.
By loan type, conventional loans made up 77% of loan application volume, while FHA loans composed 13% of the applications. VA loans made up 9.5% of applications and USDA loans made up 0.5%.
The post Short supply squeezes new home purchase activity in January appeared first on HousingWire.