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44 | M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST ORIGINATION Home Purchase Mortgage Apps Fell Nearly 30% in December Mortgage applications for new home purchases decreased 25.2% in December compared to a year ago, according to the MBA Builder Application Survey. A ccording to a report from the Mortgage Bankers Association (MBA) Builder Ap- plication Survey (BAS), data for December 2022 shows mortgage applications for new home purchases decreased by 25.2% com- pared to a year ago. Compared to November 2022, applications decreased by 5%. This change does not include any adjustment for typical seasonal patterns. "December new home purchase activity—both for applications and estimated sales—ran more than 20% behind last year's pace," said Joel Kan, MBA's VP and Deputy Chief Economist. "The decline in activity was in line with single-family hous- ing starts that were 32% lower than a year ago. Higher mortgage rates and a weakening economy held back buyers at the end of last year." "This week's builder senti- ment index from the NAHB reflected an improving outlook and increased homebuyer traffic, as mortgage rates have backed off from recent highs," Kan said. "The housing market is still in need of more starter and entry-level homes, especially when current demographic trends point to the potential for more younger house- holds to enter homeownership in the near future. New construction of these units will help these buy- ers entering the housing market." MBA estimates new single- family home sales, which has consistently been a leading indica- tor of the U.S. Census Bureau's New Residential Sales report, is that new single-family home sales were running at a seasonally adjusted annual rate of 641,000 units in December 2022, based on data from the BAS. The new home sales estimate is derived using mortgage application in- formation from the BAS, as well as assumptions regarding market coverage and other factors. The seasonally adjusted esti- mate for December is a decrease of 2.9% from the November pace of 660,000 units. On an unad- justed basis, MBA estimates that there were 45,000 new home sales in December 2022, a decrease of 8.2% from 49,000 new home sales in November. By product type, conventional loans composed 69.1% of loan applications, FHA loans com- posed 20%, RHS/USDA loans composed 0.3%, and VA loans composed 10.5%. The average loan size of new homes increased from $392,465 in November to $399,555 in December.