Mortgage applications for new home purchases plunged 22% relative to the previous month, according to the Mortgage Bankers Association.
This change does not include any adjustment for typical seasonal patterns.
"Following strong new home sales in October, our data shows November sales volume dropped significantly,” said Mike Fratantoni, MBA’s chief economist. “Average loan size increased to almost $307,000 in November from roughly $300,000 in October, indicating that builders are having greater success with higher priced homes and difficulty at the entry level, as first-time buyers continued to face tight credit conditions."
By product type, conventional loans composed 69.3% of loan applications, FHA loans composed 15.8%, RHS/USDA loans composed 0.9 percent and VA loans composed 14%. The average loan size of new homes increased from $300,289 in October to $306,975 in November.
The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 401,000 units in November 2014, based on data from the BAS. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.
The seasonally adjusted estimate for November is a decrease of 13% from the October pace of 461,000 units. On an unadjusted basis, the MBA estimates that there were 28,000 new home sales in November 2014, a decrease of 22.2% from 36,000 new home sales in October.