Home >> Market Trends >> Affordability >> Home Purchase Mortgage Apps Increased Nearly 17% in May
Print This Post Print This Post

Home Purchase Mortgage Apps Increased Nearly 17% in May

The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for May 2023 shows mortgage applications for new home purchases increased 16.6% compared from a year ago. Compared to April 2023, applications increased by 8%.

“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 VP 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% 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% compared to a year ago, while existing-home sales in recent months continue to experience annual declines of more than 20% on a non-seasonally adjusted basis," said Kan. "These results were also broadly in line with the Census data showing an uptick in residential housing starts and permitting in recent months.”

MBA estimates new single-family home sales, which has consistently been a leading indicator of the U.S. Census Bureau’s New Residential Sales report, is that new single-family home sales were running at a seasonally adjusted annual rate of 755,000 units in May 2023, based on data from the BAS. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.

The seasonally adjusted estimate for May is an increase of 16.3% from the April pace of 649,000 units. On an unadjusted basis, MBA estimates that there were 64,000 new home sales in May 2023, an increase of 10.3% from 58,000 new home sales in April.

By product type, conventional loans composed 67% of loan applications, FHA loans composed 22.8%, RHS/USDA loans composed 0.3%, and VA loans composed 10%.

Overall, the average loan size of new homes increased from $401,756 in April to $403,581 in May.

To read the full report, including more data and methodology, click here.

About Author: Demetria Lester

Demetria C. Lester is a reporter for DS News and MReport magazines with more than eight years of writing experience. She has served as content coordinator and copy editor for the Los Angeles Daily News and the Orange County Register, in addition to 11 other Southern California publications. A former editor-in-chief at Northlake College and staff writer at her alma mater, the University of Texas at Arlington, she has covered events such as the Byron Nelson and Pac-12 Conferences, progressing into her freelance work with the Dallas Wings and D Magazine. Currently located in Dallas, Texas, Lester is an avid jazz lover and likes to read. She can be reached at [email protected].

Check Also

Fannie Mae Analysis Predicts a Rebounding Economy in 2025

"The economy is now slowing from the otherwise robust first estimate of third quarter growth," said Doug Duncan, Fannie Mae SVP and Chief Economist.