Mortgage applications for new homes cool off

The Scotsman Guide - Victor Whitman - 18 January 2017

Mortgage applications for new-home purchases in December have cooled, but are still running ahead of the pace of a year earlier, the Mortgage Bankers Association reported.

Applications have increased by 2 percent over the December 2015 level, according to the trade group’s builder application survey.

"Mortgage applications for new single family homes increased on a year over year basis in every month of 2016, with December displaying the thinnest margin over 2015," said Lynn Fisher, MBA's vice president of research and economics. "However, growth in applications set a high benchmark in December 2015, and it is not yet clear if the recent rise in interest rates is having an impact on applications for new homes."

The average loan size of new homes increased to $331,354 in December from $329,389 in November, MBA said.  New single-family home sales were running at a seasonally adjusted annual rate of 478,000 units in December, a decrease of nearly 19 percent from the November level, MBA said.

"Looking forward to 2017, MBA continues to forecast more than 10 percent growth in single family housing starts," Fisher said.