March New Home Purchase Mortgage Applications Increased 6.2 Percent

WASHINGTON, D.C. (April 16, 2024) - The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for March 2024 shows mortgage applications for new home purchases increased 6.2 percent compared from a year ago. Compared to February 2024, applications increased by 1 percent. This change does not include any adjustment for typical seasonal patterns.

"March is typically a month when new home purchases see a seasonal boost, but this year March applications for new home purchases saw less than a one percent increase over the prior month on an unadjusted basis," said Joel Kan, MBA's Vice President and Deputy Chief Economist. "Applications were still ahead of last year's pace, but at 6 percent, the annual growth rate was the slowest since September 2023. Homebuyers remain adversely impacted by strong home-price growth and mortgage rates hovering around 7 percent. The FHA share of applications did increase in March, exceeding 26 percent, compared to a 24 percent average for the prior 12 months. A higher FHA share can be a sign of more first-time buyer activity, but that segment of buyers is also more sensitive to affordability challenges."

Added Kan, "MBA's estimate of new home sales fell more than 10 percent over the month to a seasonally adjusted pace of 615,000 units, the slowest annual pace in four 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 615,000 units in March 2024. 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 March is a decrease of 10.7 percent from the February pace of 689,000 units. On an unadjusted basis, MBA estimates that there were 60,000 new home sales in March 2024, a decrease of 3.2 percent from 62,000 new home sales in February.

By product type, conventional loans composed 63.0 percent of loan applications, FHA loans composed 26.4 percent, RHS/USDA loans composed 0.3 percent and VA loans composed 10.4 percent. The average loan size for new homes decreased from $405,719 in February to $405,400 in March.

MBA's Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country. Utilizing this data, as well as data from other sources, MBA is able to provide an early estimate of new home sales volumes at the national, state, and metro level. This data also provides information regarding the types of loans used by new home buyers. Official new home sales estimates are conducted by the Census Bureau on a monthly basis. In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.

For additional information on MBA's Builder Application Survey, please click here.