The latest numbers for new-home purchase applications reflected a slight recovery from a near-term dip in November and a 42% gain over December 2019.
Builders’ purchase apps in December rose a scant 0.2% month-over-month after falling 16%
“In the coming months, we expect homebuilding to continue to ramp-up to meet demand. Housing inventory, particularly for existing homes, is still extremely tight,” Joel Kan, associate vice president of economic and industry forecasting at the MBA, said in a press release.
The three-month estimated average for new-home sales in December was 877,000 units, and that brought the average for all of 2020 to roughly 796,000, up from 717,000 units in 2019, Kan said.
In December alone, the MBA estimated that new-home sales in the single-family market ran at a seasonally adjusted annual rate of 876,000. The MBA bases that figure on an analysis of application data from builder lending affiliates representing roughly one-third of the market.
Unadjusted estimates suggest there were 59,000 new home sales during December. However, the seasonally adjusted estimate represents nearly a 6% increase month-over-month.
The average size of loans consumers applied for in the new-home market during December rose to $367,502 from $357,554 the previous month.
Conventional loans made up over 73% of applications, followed by loans insured by the Federal Housing Administration at 16%, mortgages guaranteed by the Department of Veterans Affairs at 10%, and Rural Housing Service and U.S. Department of Agriculture loans at almost 1%. This breakdown was similar to that seen the previous month.
