Loan applications for the purchase of newly constructed homes
Volume was up 22.1% on a year-over-year basis and it increased by 2% compared to March, the monthly Builder Application Survey reported. In April 2023,
This also compared with an annual growth rate of just 6% in March. It makes 15 consecutive months of year-over-year improvement, noted Joel Kan, the MBA's deputy chief economist.
"New home purchase activity increased at a healthy pace in April 2024 after a slight pause in March," Kan said in a press release. "There continues to be healthy demand for new homes, given greater availability and other benefits over existing home purchases such as builder concessions and customization options."
The increase in activity occurred even as the average for the 30-year fixed rate mortgage
In particular, the first-time home buyer segment was strong based on the number of applications seeking Federal Housing Administration-insured financing.
"The FHA share of applications [was] at 26.3% in April, higher than the survey average of 18% dating back to 2013," Kan said; however, it was a decline from a 26.4% share in March. "Our estimate of new home sales increased more than 13% to 699,000 units, the strongest pace in three months." That annual rate is seasonally adjusted.
The April estimate is an increase of 13.7% over March's pace of 615,000 units.
The MBA calculated 62,000 new home sales in April on an unadjusted basis, which is a 3.3% increase from 60,000 units in March.
Even though the FHA share grew, the average loan amount also increased on a month-to-month basis, to $405,490 in April from $405,000 during March.
Conventional loans had a 62.8% share in April, compared with 63% in March. Veterans Affairs mortgages increased their share to 10.5% from 10.4% one month prior, while the U.S. Department of Agriculture/Rural Housing Service maintained its 0.3% share.
