On a monthly basis there was an 18% decrease but that was due to a spike in applications for loans for new homes following the hurricane season. December saw a return to more normal levels, the Mortgage Bankers Association reported.
Conventional loans made up 75.2% of applications, FHA loans 15.1%, RHS/USDA loans 2.3% and VA loans 10.1%. The average size of new home loans increased to $339,203 in December from $337,427 in November.
MBA estimates of December home sales
Based on data from its Builder Applications Survey, the Mortgage Bankers Association estimates that there was a 16.4% drop in sales of single-family homes to 554,000 (seasonally adjusted annual rate) compared to November’s pace of 663,000.
“Based on December applications, we forecast that new home sales fell in December but remained nearly 16% higher than a year ago, and we are anticipating only modest year over year growth for new home sales in 2018.
Despite robust demand, a lack of labor and land will continue to constrain homebuilders," said Lynn Fisher, MBA Vice President of Research and Economics.
More market update:
The number of purchase mortgages originated for new homes increased by 7.8% in December compared to a year earlier.