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WASHINGTON, D.C. (January 14, 2021) – The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for December 2020 shows mortgage applications for new home purchases increased 42.2 percent compared from a year ago. Compared to November 2020, applications increased by 0.2 percent. This change does not include any adjustment for typical seasonal patterns.

“The new home sales market closed out 2020 strong. Mortgage applications in December were essentially unchanged from November, but activity was up 42 percent compared to December 2019,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Despite the ongoing economic impact of the pandemic, households seeking more space, assisted by low mortgage rates, drove the demand for new homes higher. This brought the three-month estimated average of new home sales to 877,000 units, and the 2020 average to around 796,000 units – much higher than the 717,000 units in 2019.”

Added Kan, “In the coming months, we expect home building to continue to ramp-up to meet demand. Housing inventory, particularly for existing homes, is still extremely tight.”

MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 876,000 units in December 2020, 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 December is an increase of 5.9 percent from the November pace of 827,000 units. On an unadjusted basis, MBA estimates that there were 59,000 new home sales in December 2020, unchanged from the same level in November.