New Home Sales Increase in October As Purchase Applications Rose 3% Over The Prior Week


The Mortgage Bankers Association reported This Week in Real Estate that purchase applications rose 3% over the prior week marking the second consecutive week of mortgage application growth. That is in line with the decline in rates as they fell for the second week in a row. The 30-year fixed-rate is now half a percentage point lower than its recent high. According to, the week ending November 19th saw fewer new listings for sale compared to the same week a year ago, the 20th straight week of yearly declines. While inventory has grown it is a result of homes staying on the market longer rather than an influx of new homeowners listing their homes for sale. Additionally, home price appreciation has decelerated for six consecutive weeks. Below are a few newsworthy events from the fourth week of November that influence our business: 

New Home Sales Increase in October. New home sales rebounded in October despite higher mortgage rates, likely due to low existing home inventory and builders using incentives to attract buyers to the new home market. The U.S. Department of Housing and Urban Development and the U.S. Census Bureau estimated sales of newly built, single-family homes in October at a 632,000 seasonally adjusted annual pace, which is a 7.5% increase over downwardly revised September rate of 588,000 and is 5.8% below the October 2021 estimate of 671,000. Only 63,000 of the new home inventory is completed and ready to occupy. This count has been increasing in recent months and is up 75.0% compared to a year ago. Homes under construction accounts for 63.8% of the inventory. Moreover, sales are increasingly coming from homes that have not started construction, with that count up 13.7% year-over-year. The median sales price increased to $493,000 in October, up 8.2% compared to September and is up 15.4% compared to a year ago. Nationally, on a year-to-date basis, new home sales are down 14.2% for the first ten months of 2022.

Will Plunging Mortgage Rates Spark a New Homebuying Rush? Here’s What the Latest Housing Statistics Say. The headliner is that mortgage rates fell for the second week in a row, with the 30-year fixed-rate mortgage averaging 6.58% in the week ending Nov. 23, according to Freddie Mac. The most popular mortgage product is now half a percentage point lower than its recent high. It’s worth noting, however, that applications for mortgages have risen in each of the past two weeks, in line with the decline in rates, according to data from the Mortgage Bankers Association. Apparently, prospective buyers are keeping their eye on the ball and pouncing at any window of opportunity. Another hopeful trend is underway: Home prices have decelerated for the sixth straight week, meaning that they rose, but at a slower pace than before. In this case, prices were 11% higher compared with a year ago for the week ending Nov. 19, a bit slower growth than the prior week’s 11.1%. data, however, shows that fewer homes were listed for sale in the week ending Nov. 19 compared with a year ago. That’s the 20th straight week of yearly declines.

Rates, Mortgage App Volume Improve Heading into Holiday Season. Mortgage applications rose 2.2% last week compared with the previous week, prompted by a slight decline in interest rates, according to the Mortgage Bankers Association’s seasonally adjusted index. Mortgage applications to purchase a home rose 3% for the week, but they were down 41% from a year ago. Some potential buyers may now be venturing back in, hearing that there is less competition and more negotiating power, but there is still a shortage of homes for sale and prices have not come down significantly. Refinance applications, which are usually most sensitive to weekly rate moves, rose 2% for the week but were still 86% lower than the same week one year ago. “The decrease in mortgage rates should improve the purchasing power of prospective homebuyers, who have been largely sidelined as mortgage rates have more than doubled in the past year,” Joel Kan, an MBA economist, said in a release. Mortgage rates haven’t moved at all this week, as the upcoming Thanksgiving holiday tends to weigh on volumes. “Expect things to get back closer to normal next week, but for the market to continue to wait until December 13 and 14 for the biggest moves,” said Matthew Graham, chief operating officer at Mortgage News Daily. That’s when the government releases its next major report on inflation and the Federal Reserve announces its next move on interest rates.

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