Newly constructed home purchase application volume continued its upward momentum during January, with
There was a 40% increase in applications to purchase a new home compared with December and a 35.3% increase compared with January 2019, the MBA's Builder Application Survey found.
"New-home applications and sales activity surged in January," Joel Kan, the MBA's associate vice president of economic and industry forecasting, said in a press release. "This was a continuation of the end of 2019, which saw strong residential construction and increased purchase applications activity. Even with some global and domestic economic uncertainty, builders have ramped up production in recent months to meet increased homebuyer demand."
This was seen in the BuildFax January Housing Health Report, which found that while single-family construction authorizations were down 41 basis points from December, they were up 6.03% compared with January 2019.
Meanwhile, the average loan size rose to a record-high of $346,000, according to the MBA, compared with $338,625 in December and $334,532 a year earlier.
New single-family home sales were running at a seasonally adjusted annual rate of 865,000 units in January, also a record high, the MBA said. December's pace was 689,000 units.
On an unadjusted basis, there were 66,000 new-home sales in January, an increase of 37.5% from 48,000 new-home sales in December.
Both industry and consumer indicators reflected positive views of the current state of the purchase market.
Homebuilder sentiment remained high in February, although the National Association of Home Builder/Wells Fargo Housing Market Index
From the consumer side, the Fannie Home Purchase Sentiment Survey for January was at
By product type, conventional loans composed 69.5% of newly constructed home mortgage applications, while Federal Housing Administration-insured mortgages composed 17.8%, Veterans Affairs-guaranteed loans comprised 12% and U.S. Department of Agriculture/Rural Housing Service loans made up 0.8%, according to the MBA.
Meanwhile, existing housing construction activity increased again in January, the BuildFax report noted. Existing maintenance volume was up 5.67% over
"Housing activity has started on strong footing this year, which should be welcome news for the broader economy," said BuildFax Managing Director Jonathan Kanarek in the report. "The housing market, which accounts for a substantial portion of gross domestic product, has the potential to drive increased growth, providing a balance to any concerns of a sluggish market heading into 2020.
"While we're still experiencing some growing pains regarding the recent housing shortage, as more inventory becomes available, we might see the housing market growing at an even faster pace."