In November, there was a significant surge in new-home sales, with the most substantial annual increase since July. The Mortgage Bankers Association reported a 3.1% rise in new-home purchase activity compared to the previous year. Despite a 7% dip from October on an unadjusted basis, the housing market saw positive growth.
The steady mortgage rates and the increase in new and existing housing inventories contributed to this sales surge. This boost in sales was driven by a broader range of options for potential buyers due to the expansion in housing inventory, as highlighted by Mike Fratantoni, the MBA’s chief economist.
The Mortgage Rates and Housing Inventory Impact
- The average 30-year fixed mortgage rate slightly increased to 6.22% in November.
- There was a 25 basis point drop in the federal funds rate by the Federal Open Market Committee.
- Actively listed homes witnessed a 12.6% surge compared to the same period last year.
Although there was a decrease in new-home sales from October to November, the impact was less pronounced on a seasonally adjusted basis. In November, there were 51,000 new home sales, with a 7.3% drop from October’s sales figures. The MBA estimated new single-family home sales at a seasonally adjusted annual rate of 755,000 units for the month.
Market Share and Loan Types
- Conventional loans saw a decrease in market share from 51.9% to 49.5%.
- Department of Veterans Affairs and Federal Housing Administration loans experienced a rise in their shares.
- The average loan size for new homes slightly decreased to $378,063 in November.
The fluctuations in new-home sales, mortgage rates, and loan types showcase the dynamic nature of the real estate financing landscape. This market trend presents opportunities for buyers to explore the burgeoning inventory and competitive interest rates. For individuals looking to leverage these conditions, ABC Lower, an online financing tool in the United States, can provide valuable assistance.
