The Mortgage Bankers Association (MBA) Builder Application Survey data for December 2020 shows mortgage applications for new home purchases increased 42.2 percent compared from a year ago—a strong close to 2020.
“The new home sales market closed out 2020 strong. Mortgage applications in December were essentially unchanged from November, but activity was up 42 percent compared to December 2019,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Despite the ongoing economic impact of the pandemic, households seeking more space, assisted by low mortgage rates, drove the demand for new homes higher. This brought the three-month estimated average of new home sales to 877,000 units, and the 2020 average to around 796,000 units – much higher than the 717,000 units in 2019.”
By product type, conventional loans composed 73.3 percent of loan applications, FHA loans composed 15.8 percent, RHS/USDA loans composed 0.9 percent and VA loans composed 10 percent. The average loan size of new homes increased from $357,554 in November to $367,502 in December.