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WASHINGTON, D.C. (February 18, 2021) – The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for January 2021 shows mortgage applications for new home purchases increased 18.9 percent compared from a year ago. Compared to December 2020, applications increased by 17 percent. This change does not include any adjustment for typical seasonal patterns.

“New home sales activity started 2021 at a strong pace, with purchase mortgage applications for newly constructed homes jumping nearly 19 percent compared to last January. These results are consistent with the still-increasing pace of single-family housing starts and permitting activity reported over the last several months,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “The low supply of existing homes on the market, and changing household preferences toward newer, larger homes, continue to spur buyer demand.”

Added Kan, “MBA’s estimate of new home sales has proven to be a reliable leading indicator of the U.S. Census Bureau’s monthly new home sales number. MBA estimates that new home sales increased over 3 percent in January to a 905,000 seasonally adjusted annual pace, which is the second-highest since our tracking began in 2013, and slightly below October 2020’s record pace of 927,000 units.”

MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 905,000 units in January 2021, 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 January is an increase of 3.3 percent from the December pace of 876,000 units. On an unadjusted basis, MBA estimates that there were 69,000 new home sales in January 2021, an increase of 16.9 percent from 59,000 new home sales in December.