May New Home Purchase Mortgage Applications Increased 13.8 Percent

WASHINGTON, D.C. (June 13, 2024) – The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for May 2024 shows mortgage applications for new home purchases increased 13.8% compared from a year ago. Compared to April 2024, applications increased by 1%. This change does not include any adjustment for typical seasonal patterns.

“There continues to be strength in the new home purchase market, as purchase applications increased in May compared to both the prior month and from a year ago,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “With existing-home inventory still lagging in many markets, many homebuyers have turned their interest toward newly built homes, particularly FHA borrowers. The FHA share of applications was 26.5%, the highest share since the survey high of 27.1% in November 2023. The average loan size was $400,150, a decline from last month’s average of more than $405,000.

Added Kan, “MBA’s estimate of new homes show a slight increase to 702,000 units in May, the strongest pace since October 2023. 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 702,000 units in May 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. 

Conventional loans composed 63.4% of loan applications, FHA loans composed 26.5%, RHS/USDA loans composed 0.3% and VA loans composed 9.8%. The average loan size for new homes decreased from $405,490 in April to $400,150 in May.

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.