Home buyers continue to be very interested in newly built homes, as a new report shows that mortgage applications for new home purchases continued increasing in January.
The information comes courtesy of the Mortgage Bankers Association, which tracks new home purchase mortgage application data. According to the MBA’s newest report, mortgage applications for new home purchases were up by 18.9% in January compared to January 2020.
New home mortgage applications in January were also well above December, demonstrating that demand for new homes is on an upward trajectory.
"New home sales activity started 2021 at a strong pace, with purchase mortgage applications for newly constructed homes jumping nearly 19% compared to last January,” said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting.
“These results are consistent with the still-increasing pace of single-family housing starts and permitting activity reported over the last several months,” Kan said. "The low supply of existing homes on the market, and changing household preferences toward newer, larger homes, continue to spur buyer demand."
The fact that new home mortgage applications were up in January indicates that new home sales figures will likely continue rising over the next few months.
According to the MBA, conventional loans accounted 72.6% of new home mortgage applications in January, while FHA loans made up 16.2%, VA loans were 10.3%, and RHS/USDA loans were 0.9%.