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.