Mortgage Applications Rise in January

January was a strong month for mortgage applications for new home purchases when compared to December. Year-over-year numbers remained flat.

The Mortgage Bankers Association reports applications increased by 43 percent compared with December, according to its Builder Application Survey. The association estimates new single-family home sales were running at a seasonally adjusted annual rate of 713,000 units in January 2019.

"After two lackluster months, new home sales surged almost 30 percent in January to the fastest pace since our survey began in 2013," said Joel Kan, MBA's associate vice president of economic and industry forecasting, said in a statement. "The healthy job market, faster wage growth, moderating price gains and lower mortgage rates all helped home sales recover. Additionally, builders seem to be seeing improvement in their labor shortages, as government survey data showed increases in construction hiring and openings in December."

By product type, conventional loans comprised 68.7 percent of loan applications, FHA loans 18.6 percent, RHS/USDA loans 0.5 percent and VA loans were 12.2 percent. The average loan size of new homes decreased from $334,944 in December to $334,532 in January.