The Mortgage Bankers Association has released new monthly numbers that showed new home purchase applications were up 8 percent in May compared to the month prior. When stacked against May 2022, apps were up 16.6 percent last month.
“Purchase activity for newly built homes was strong in May, with builders continuing to bring homes to the market and buyers keen to act on available units,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Applications for purchase loans were up on a monthly basis and increased annually for the fourth consecutive month. Our estimate of new home sales also jumped in May, up 16 percent to the fastest pace of new home sales in 15 months.
“The new home sales segment continues to gather momentum, growing at a pace of 5 percent compared to a year ago, while existing-home sales in recent months continue to experience annual declines of more than 20 percent on a non-seasonally adjusted basis,” added Kan. “These results were also broadly in line with the Census data showing an uptick in residential housing starts and permitting in recent months.”
By product type, conventional loans composed 67 percent of loan applications, FHA loans composed 22.8 percent, RHS/USDA loans composed 0.3 percent and VA loans composed 10 percent.
The average loan size of new homes increased from $401,756 in April to $403,581 in May.