New homes continue to be a very popular option among prospective home buyers, assuming they can find a new home to buy, of course.
According to a new report from the Mortgage Bankers Association, mortgage applications for new home purchases increased in March, continuing a trend that stretches back into late last year.
Per MBA’s report, mortgage applications for new homes were up by 7% in March compared to the same month last year. The increase was even more significant when compared to the previous month.
According to the MBA report, new home mortgage applications were up 12% in March 2021 compared to February 2021.
An increase in new home mortgage applications isn’t uncommon in March, according to Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. But Kan cautioned that while buyer demand may be increasing, supply of new homes is still lagging, which is already impacting sales.
"New home purchase application activity is typically strong in March, and this year did not disappoint. Applications strongly increased on a monthly and annual basis," Kan said.
"However, MBA's estimate of new home sales declined by more than 4% last month, as we continue to see increasing home prices and a low number of homes on the market, caused in part by increased challenges facing homebuilders,” Kan continued.
“Supply chain delays have led to more expensive building materials and delayed deliveries, and these have made it more difficult for builders to keep up with the strong demand for buying a home seen in most of the country this spring,” Kan added.
Kan also noted that due to continuing increases in home prices, the average loan size for a new home purchase was $374,000 in March, the highest in the history of the MBA’s survey, which stretches back to 2013.