The MBA reported Thursday morning that purchase mortgage applications fell 11% in December following an 18% decline in the prior month.
Based on this non-seasonally adjusted index, MBA economists estimate sales of new single-family homes were running at a seasonally adjusted annual rate of 402,000 in December. The latest report by the Census Bureau showed that new homes were being sold at a seasonally adjusted annual rate of 464,000 in November.
Also on Thursday, the National Association of Home Builders reported that its survey of builder confidence slipped one notch from December to 57 in January.
The NAHB/Wells Fargo Housing Market Index has been above 50 for the past eight months. (A reading above 50 means that more builders view conditions as good as opposed to bad.)
“Rising home prices, historically low mortgage rates and significant pent-up demand will drive a continuing, gradual recovery in the year ahead,” said NAHB chief economist David Crowe. “However, the pace of the recovery could be stronger were it not for rising construction costs and inaccurate appraisals that are keeping some home sales from going through.”
NAHB economists have forecast that new homes sales will total 607,000 in 2014, up 40% from last year.