The month-to-month decline in mortgage applications for new homes accelerated in October, the Mortgage Bankers Association found in its Builder Applications Survey.
Applications dropped 8% compared to September, but the non-seasonally-adjusted rate might have been artificially depressed by new Consumer Financial Protection Bureau disclosure rules.
"On top of normal seasonal slowdown, the October decline in mortgage applications to builder affiliates was likely amplified by some applications being pulled forward into September ahead of the implementation of the Know Before You Owe Rule on October 3," said MBA vice-resident of research and economics Lynn Fisher in a Nov. 13 news release.
She noted, however, that "Despite the decrease, our estimate of new single-family housing sales for October was up more than 7% from a year ago."
There were 495,000 new single-family home sales last month, the MBA estimated, based on the survey's mortgage application figures and assumptions on factors affecting the market. That's a 9.7% drop from the 548,000 units estimated sold in September.
67.2% of the new home mortgages were conventional loans, while 19.2% constituted Federal Housing Administration-backed loans. The United States Department of Agriculture's Rural Housing Service backed 1% of the loans, while the Veteran Affairs Department supported 12.7%.
Additionally, the average size of these mortgages dropped 1.2% to $320,881 between September and October.
