The Mortgage Bankers Association (MBA) is projecting a decline in new home sales for January. Based on data collected from its Builder Application Survey (BAS), it estimates that sales of newly constructed single-family homes were at a seasonally adjusted annual rate of 821,000 units, a decrease of 7.4 percent from the December rate of 887,000 units. On an unadjusted basis there were an estimated 66,000 homes sold during the month, 10 percent more than the 60,000 sales the prior month. The BAS found applications for mortgages to purchase new homes were down 12.5 percent compared to January 2021 but were 10 percent higher than in December. Those numbers do not contain any adjustment for seasonal patterns. “Purchase applications for new homes fell on an annual basis in January, but the 10 percent monthly gain is a positive sign to start the year,” according to Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “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. “MBA’s estimate of new home sales fell in January to its slowest annual pace since July 2021. Purchase activity for new homes continues to be concentrated in the higher end of the market and overall sales prices continue to increase, as evidenced by another record-setting month for the average loan size at $427,000 ,” Kan said.
Source: Mortgage News Daily