New-home purchase apps surge in October

The strong growth follows a decline in September due to hurricane impacts

New-home purchase apps surge in October

Mortgage applications for new-home purchases grew the most in October so far in the year, according to the Builder Application Survey released by the Mortgage Bankers Association (MBA).

Applications during the month rose 16.1% compared to the year-ago period, while applications jumped 23% compared to September. The month-over-month change does not include any adjustment for typical seasonal patterns.

Read more: Continuing demand supports increase in new-home purchase apps

"October registered the strongest growth rate in applications so far this year, following September's hurricane-related decrease," said Lynn Fisher, MBA's vice president of research and economics. "Overall, applications reached near August levels. Texas mirrored the national pattern, and Florida fell just 4% short of its August total. The Builder Application Survey does not measure activity in Puerto Rico."

Conventional loans accounted for 71.8% of all applications, while FHA loans had a 15.1% share. RHS/USDA loans composed 1.4% and VA loans composed 11.7%. New-home loan sizes averaged $339,534 during the month, an increase from the $334,722 average in September.

Read more: July sees new-home purchase apps plummet

Based on survey data, MBA said it estimates a seasonally adjusted annual rate of 659,000 units in new single-family home sales in October. The seasonally adjusted estimate is an increase of 15.4% from the September pace of 571,000 units. There were 53,000 new-home sales in October on an unadjusted basis, according to MBA’s estimates. This is an increase of 26.2% from 42,000 new home sales in September.