Recent data from the Mortgage Bankers Association showed new home sales jumped by 35 percent in January, selling at an estimated pace of 543,000 units, compared to 402,000 units in December.
“While the big jump may appear to conflict with other data, such as MBA’s purchase application index and NAR’s existing home sales data that point to a weak market for existing homes, our Builder Application Survey estimate is consistent with reports of homebuilder sentiment that show strength in the market for new homes,” MBA Chief Economist Mike Fratantoni said. “It is also worth noting that the significant January increase also followed a particularly slow pace of sales in November and December.
The MBA estimated 38,000 new home sales in January, up 36 percent from 28,000 units in December. Mortgage applications for new home purchases rose by 27 percent unadjusted, compared to December.
Conventional loans comprised nearly 70 percent of loan applications, followed by FHA loans at 15.9 percent, RHS/USDA loans at 1.3 percent and VA loans at 13.4 percent. The average loan size fell from $300,444 in December to $289,358 in January.
Meanwhile, the National Association of Home Builders said unusually severe weather conditions and concerns regarding the cost of labor pushed builder confidence for new homes down in January.
“Significant weather conditions across most of the country led to a decline in buyer traffic last month,” NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Del., said. “Builders also have additional concerns about meeting ongoing and future demand due to a shortage of lots and labor.”