New-home mortgage applications drop over stock market volatility: MBA
Mortgage applications for new homes declined again as worries over the stock market and the global economy outweighed lower interest rates for potential buyers, the Mortgage Bankers Association said.
"New-home sales declined for the second straight month in December, from 627,000 units to 552,000 [seasonally adjusted] units, as factors such as a volatile stock market and economic uncertainty, both here and abroad, likely kept some prospective buyers away," Joel Kan, the MBA's associate vice president of economic and industry forecasting, said in a press release.
"This pullback in activity was in spite of falling mortgage rates and a robust job market. Looking ahead, if mortgage rates remain low, housing inventory rises, and home-price growth continues to steady, we expect to see a rebound in purchase activity this spring."
On an unadjusted basis, there was an estimated 37,000 new-home sales in December 2018, a decrease of 17.8% from 45,000 in November, the MBA said.
The average loan size to purchase a newly constructed home increased to $334,944 in December from $326,037 in November, but was down from $339,203 in December 2017.
By product type, conventional loans composed 69.5% of new-home loan applications, Federal Housing Administration-insured loans composed 17.3%, Veterans Affairs-guaranteed loans had a 12.5% share and U.S. Department of Agriculture/Rural Housing Service applications were 0.7% of the total.