The Mortgage Bankers Association has just released October numbers and found that new home purchase apps fell 13 percent month-over-month and 28.6 percent annually in October. The MBA estimates that new single-family home sales were running at a seasonally adjusted annual rate of 598,000 units in October 2022.
“New home purchase activity weakened on a monthly and annualized basis in October, as the sharp jump in mortgage rates to nearly 7 percent reduced both overall demand and the purchasing power for many prospective buyers,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The average loan size decreased to $400,616, down 8 percent from its peak in April 2022. The moderation in loan amounts is attributed to slower home-price growth and buyers stepping away from higher-priced homes.”
By product type, conventional loans composed 68.6 percent of loan applications, FHA loans composed 20.1 percent, RHS/USDA loans composed 0.3 percent and VA loans composed 11 percent. The average loan size of new homes decreased from $406,767 in September to $400,616 in October.