Americans sought mortgages on fewer newly built homes in April than a year ago but applied for loans for new and existing homes in greater numbers last week than the week before, according to the Mortgage Bankers Association (MBA).
The trade group reported Thursday, May 14, that its Builder Application Survey (BAS) data for April showed new-house mortgage applications fell by 25% from March and 12% from April 2019 as the COVID-19 pandemic shut down much of the U.S. economy.
Meanwhile, mortgage applications overall rose 0.3% during the week ending May 8 from the week ending May 1, according to the MBA's Weekly Mortgage Applications Survey, continuing a nascent market recovery the trade group noted in last week's weekly report.
New home sales dip to 2016 level
The new home survey tracks application volume from homebuilders' mortgage subsidiaries. By contrast, the U.S. Census Bureau's new home sales estimates are based on contract signings. The bureau's April numbers are not yet out, but in March, they were down 15.4% from February and 9.5% below March 2019.
Joel Kan, the MBA's associate vice president of economic and industry forecasting, said new home sales in April were at an annualized rate of 533,000 units, the slowest since December 2016 and down sharply from the March rate of 697,000 units.
While the spring selling season for new houses, like the market in general, may be a bust, Kan, like some others in the industry, sees light at the end of the tunnel.
"There's evidence now that unrealized, pent-up demand is being released as states start to reopen," he said. "We expect that heading into the summer, more prospective homebuyers will gradually return to the market."