In May, the number of applications for mortgage purchase of housing decreased

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Another report was released, indicating a potential slowdown in the home sales market.

According to a survey of builders conducted by the Mortgage Bankers Association for May 2021, the number of applications for mortgages for new home purchases decreased by 5.9% compared to the previous year. BAS monitors the volume of applications from subsidiaries of mortgage companies of residential developers across the country. Applications decreased by 9% compared to April.

“The number of applications for mortgages to buy a new home declined in May for the second straight month, while the average loan size of $ 384,000 increased for the fourth straight month and reached a new high,” said Joel Kahn, MBA’s deputy vice president of economy. and industry forecasting in a prepared statement.

The MBA estimates the seasonally adjusted sales of new single-family homes in May 2021 at an annualized rate of 741,000 units. Information about mortgage applications is drawn from BAS, as well as assumptions about market coverage and other factors. A seasonally adjusted estimate for May is a 3.8% decline from the April rate of 770,000 units. Kahn says new home sales have dropped about 20% since hitting a record 927,000 units in October 2020. He attributed this to low housing stock and rising prices.

The MBA estimates that 68,000 new homes were sold in May 2021 using unadjusted data. That’s down 5.6% from the 72,000 recent home sales in April.

Ordinary loans accounted for 73.9% of loan applications. FHA loans accounted for 14.8%, VA loans accounted for 10.4% and RHS / USDA loans accounted for 0.9%. In April, the average loan for a new home was $ 377,434. In May, it rose to $ 384,323. “Loan balances continue to rise due to a larger share of sales in higher-end market segments, as well as an increase in sales prices due to strong demand and high costs of building materials,” Kahn said in a prepared statement.

Other recent reports also point to a downturn in the home sales market.

Last week Redfin reported four-week drop in unfinished sales and a 12% drop in the demand index from its peak at the end of March. However, pending home sales were up 29% year over year. But seasonally adjusted unfinished sales were down 9.7% from a peak of four weeks ago, which Redfin attributes to people who have decided to pause home searches and take advantage of the holiday weekend.

According to Redfin, the number of mortgage applications has been falling since the end of March. They rose 0.3% for the week (seasonally adjusted) in the week ending June 4. Despite low mortgage rates and easier access to credit, they are now 7% below their average levels in January and February 2020.

According to the Fannie Mae Buying Sentiment Index, only 35% of consumers said May is a good time to buy a home. In April it was 47%, and in May 2020 it was 52%.

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