Mortgage Bankers Association (MBA) Construction Applications Survey (BAS) data for May 2021 shows mortgage applications for the purchase of a new home down 5.9% from a year ago. Compared to April 2021, requests were down 9% month over month.
“Mortgage applications for the purchase of a new home fell in May for the second consecutive month, while the average loan amount, at $ 384,000, increased for the fourth consecutive month and reached a new summit of inquiry, “said Joel kan, associate vice-president of economic and industrial forecasting of the MBA. “Loan balances continue to increase due to a larger share of sales in the upper end of the market, as well as increased selling prices due to high demand and high costs of building materials. . “
Sales in the luxury market continue to rise as those who have been able to save during the pandemic seek larger luxury homes. A recent study by Redfin found that purchases of upscale and luxury homes jumped 26% year-over-year in the three months ending April 30, compared to an increase of 17. 8% of affordable home purchases and a 14.8% increase in mid-range home purchases.
“The MBA estimate of new home sales showed that the seasonally adjusted annualized sales pace of sales fell 4% in May,” Kan said. “Since peaking at 927,000 units in October 2020, the annual pace of new home sales has now fallen about 20%, weighed down by low home inventories and rising prices.”
The low inventory Kan cited was another record according to Redfin in May, as the number of homes available for sale fell 27% from May 2020, with the typical home selling in just 16 days in May 2021.
MBA estimates that sales of new single-family homes were at a seasonally adjusted annual rate of 741,000 units in May 2021. The estimate of new home sales is derived from the BAS’s mortgage application information, along with assumptions. regarding market coverage and other factors. . The seasonally adjusted estimate for May is down 3.8% from April 2021’s pace of 770,000 units. On an unadjusted basis, MBA estimates that there were 68,000 new home sales in May 2021, down 5.6% from the 72,000 new home sales in April.
Wednesday, the The US Census Bureau and the US Department of Housing & Urban Development (HUD) announced their new home construction statistics for May 2021, which found private housing to start in May at a seasonally adjusted annual rate of 1,572,000, 3.6% above the revised April 2021 estimate of 1,517 000 and 50.3% above the May 2020 rate of 1,046,000. Single-family housing starts in May were at a rate of 1,098,000, 4.2% higher than April’s revised figure of 1,054,000.
“With home prices rapidly appreciating and the continuing lack of listings for the sale of existing homes, demand for new construction remains robust,” said Doug Duncan, Chief Economist at Fannie Mae. “However, home builders continue to face supply constraints, including shortages of building materials, labor and building land. Despite a slight downward trend in single-detached home starts in recent months, the total number of homes under construction rose 1.2% in May, the 12th consecutive monthly increase and its highest level since 2007. This discrepancy probably reflects in part a longer schedule for construction due to supply disruptions. However, with lumber prices falling in recent weeks and a large backlog of homes sold but not yet started, we expect single-detached housing starts to move upward in the coming months, so that delayed and postponed projects are launched. “