Hurricanes Harvey and Irma affected new-home sales in Texas and Florida, resulting in a 7.5% year-over-year nationwide decline in mortgage applications to purchase these properties in September.
There was a 20% decline in loan application activity for newly constructed homes in September compared with August, according to the Mortgage Bankers Association's Builder Application Survey.
"In particular, monthly applications fell by 37% in Florida and 11% in Texas, which account for a large share of the applications in the survey," Lynn Fisher, the MBA's vice president of research and economics, said in a press release.
Rebuilding efforts in areas hit by either storm — as well as in Puerto Rico, which was heavily damaged by Hurricane Maria — will affect new-home construction for the foreseeable future, First American Financial Chief Economist Mark Fleming previously commented. There is already a nationwide shortage of construction workers and that labor pool is being shifted to do rehabilitation and repair work.
Lennar warned about short-term delays in the delivery of new homes in Texas and the Southeast last month.
By product type, conventional loans composed 72.3% of applications, Federal Housing Administration-insured loans composed 13.9%, Veterans Administration-guaranteed loans composed 12.7% and applications for the U.S. Department of Agriculture Rural Housing Service program were just 1%.
The average loan size of new homes decreased to $334,722 in September from $334,940 in August.
New single-family home sales were running at a seasonally adjusted annual rate of 571,000 units in September, based on data from the BAS. The seasonally adjusted estimate for September is a decrease of 12.8% from the August pace of 655,000 units.
On an unadjusted basis, the MBA estimates that there were 42,000 new-home sales in September 2017, a decrease of 19.2% from 52,000 new-home sales in August.