There are too few existing homes available for sale. An ongoing issue for buyers – and the primary factor driving home price increases – the lack of for-sale inventory has led an increasing number of home buyers to consider the new home market as an alternative. Put simply, buyers who aren’t able to find an older home that fits their needs are looking at new homes for additional options. In fact, according to the latest numbers from the Mortgage Bankers Association, mortgage applications for new home purchases were up 19.1 percent in January from last year at the same time. Joel Kan, MBA’s vice president and deputy chief economist, says the spike follows an established trend. “Applications for new home purchases were strong in January, as newly built homes remained an attractive option for prospective home buyers who looked to take advantage of lower mortgage rates during the month,” Kan said. “Applications were up 19 percent from a year ago – the 12th consecutive annual increase – and the non-seasonally adjusted index was the strongest January reading in the survey’s history.” (source)
