Applications to buy a new home rose in March as buyers continue to battle for tight inventory in the market.
According to the Mortgage Bankers Association's Builder Application Survey, those requests increased 12% from February and 7% year over year. However, the new home sales estimate was down 4.5% month on month.
The seasonally adjusted estimate of 714,000 sales in March fell from 748,000 in February to its lowest monthly level since May 2020. Unadjusted estimates put 72,000 new homes sold in March, up from 65,000 in February.
While construction is on the rise compared to recent years, home builders face a number of obstacles that may delay the influx of new inventory and keep house prices high.
"Delays in the supply chain have resulted in more expensive building materials and late deliveries, and this has made it difficult for home builders to keep up with the strong demand for home purchases seen in most parts of the country in the spring," he said Joel Kan, associate MBA vice president of economic and industrial forecasting, said in a press release.
With demand far outweighing supply, the average home purchase credit rose from $ 370,679 in February to another record high of $ 374,000 in March.
Conventional loans fell from a record 74% in February to 70.9% of loan applications. The Federal Housing Administration insured loans followed but fell from 15.4% to 14.8%, the Department of Veterans Affairs guaranteed mortgages rose from 9% to 9.9% and the remaining 4.4% on loans of the Rural Housing Service and the US Department of Agriculture. Climbing of 1.5%.
The Builder Application Survey market index hit a five-month high of 274.54, down from 245.72 in February and 256.64 in March 2020.