MBA says more new homebuyers turn to FHA for financing

Mortgage applications increase on new home sales ninth consecutive month The Mortgage Bankers Association said that compared with this time last year, this suggests the inventory shortage has not eased.

Additionally, utilization of FHA-guaranteed financing reached the highest level in the survey, suggesting that newcomers to the market are also following this path.

MBA Builder application survey in October was 6% higher than in September, an increase of 39.7% Compared to October 2022.

“As more first-time homebuyers turn to the new home market for more options and some builders start building more new homes, FHA’s application rate has increased to 26% since the survey began in 2013,” Kan said. the highest ratio since.” MBA deputy chief economist said in a press release.

A recent report from the National Association of Realtors shows first-time homebuyers’ household incomes A record high in 2022 This is another sign of the difficulties this group faces in the market. The report also noted that the amount these buyers had to pay was also the highest since 1997.

mortgage rates, until recent weeksIt has been climbing close to the 8% mark, leaving many potential buyers hesitant to purchase.

“Homebuilders have been able to offer buyers Rate purchases and other incentivesKan said. “We estimate the pace of home sales increased for the third consecutive month to 715,000 annual units, the strongest sales month since May 2023.”

The seasonally adjusted estimate represents a 12.8% increase from September’s 634,000 units.

Unadjusted, home sales totaled 55,000 units in October, up 7.8% from September’s 51,000 units. October 2022 also saw an increase of 47,000 units.

By application type, conventional loans accounted for 63.6%, followed by FHA (26.3%), Department of Veterans Affairs (9.8%), and USDA/Rural Housing Service (0.3%).

The average loan size fell by more than $7,000 in October to $390,225, compared with $397,550 the previous month. It was $400,616 during the same period last year, more than $10,000 higher than the previous month.

The decrease in average balance was likely due to a 0.1% decline in residential construction materials from the previous month, What the National Association of Home Builders looks like The U.S. Bureau of Labor Statistics said in its November 15 Producer Price Index report.

this Softwood Lumber PPI After growing 1.3% in September, the seasonally adjusted decline was 2.8% in October. The index is down 12.1% from last year and is also 52.3% below its all-time high set in 2021.

For the gypsum building material, current prices are 1.4% lower than in October 2022.

In the first 10 months of this year, prices fell by 1.6%, while they rose by 10.9% in the same period in 2022 and 17.9% in 2021.

Steel mill product prices fell 2.5% in October and have fallen 12.5% ​​over the past five months, but NAHB noted that these prices are still 60% higher than pre-pandemic levels.

However, ready-mix concrete bucked the trend, rising 0.8% in October on a seasonally adjusted basis and a revised 2.1% in September.

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