Mortgage applications for new home purchases decreased about 18 percent in December compared to the previous month, according to the Mortgage Bankers Association (MBA) Builder Applications Survey (BAS).
“After playing catch-up for 2 months following the slowdown caused by hurricanes Harvey, Irma and Maria, mortgage applications for new homes declined in December to a more normal growth rate of 7.8 per on a year over year basis,” Lynn Fisher, vice president of research and economics at MBA, said.
However, compared to December 2016, mortgage applications were up 7.8 percent in December.
“Looking at all of 2017, applications increased by 7.1 percent compared to 2016,” Fisher said. “Based on December applications, we forecast that new home sales fell in December but remained nearly 16 percent higher than a year ago, and we are anticipating only modest year over year growth for new home sales in 2018. Despite robust demand, a lack of labor and land will continue to constrain homebuilders.”
New single-family home sales stood at 554,000 units in December 2017, seasonally adjusted. This is down from the November pace of 663,000 units.
In December, conventional loans made up 72.5 percent of loan applications, while FHA loans composed 15.1 percent, RHS/USDA loans accounted for 2.3 percent, and VA loans made up 10.1 percent.
The average loan size of new homes increased slightly to $339,203 in December from $337,427 in November.