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MortgagePoint ยป Your Trusted Source for Mortgage Banking and Servicing News 40 February 2025 J O U R N A L Lending/Originations MORTGAGE APPS JUMP YOY IN DECEMBER A ccording to data from the Mortgage Bankers Associa- tion's (MBA) Builder Applica- tion Survey (BAS) for December 2024, mortgage applications for purchasing new homes rose 8.9% over the previous year. The number of applications fell 3% from November 2024. Typical sea- sonal patterns have not been adjusted for this update. "Applications for newly built homes increased 9% compared to a year ago in December, while the FHA share of applications reached its second highest level in the survey's history at 29%," said Joel Kan, MBA's VP and Deputy Chief Economist. "First-time homebuyers re- mained active in the new home segment, as existing inventory for starter homes remains tight. The monthly decrease in applications was consistent with typical seasonal patterns. MBA's estimate of seasonally adjusted new home sales fell in December but remained slightly above last year's sales pace." December Home Sales Activity: In A Nutshell According to the MBA, the number of new single-family home sales in December 2024 was 601,000 units, a seasonally adjusted yearly rate that has been a leading indication of the U.S. Census Bureau's New Residential Sales report for years. The BAS' mortgage application data, along with assump- tions about market coverage and other variables, are used to calculate the new home sales estimate. The seasonally adjusted estimate for December represents a 15.7% decline compared to the pace of 713,000 units in November. According to the MBA, there were 46,000 new home sales in December 2024 on an unadjusted basis, 6.1% less than the 49,000 new home sales in November. Conventional loans accounted for 60.1% of loan applications by product type, followed by FHA loans (29.5%), RHS/USDA loans (0.5%), and VA loans (9.9%). Between November and Decem- ber, the average loan size for new homes dropped from $402,873 to $400,930. The number of applications from mortgage subsidiaries of home build- ers nationwide is monitored by MBA's Builder Application Survey. MBA is able to provide an early estimate of new home sales volumes at the national, state, and metro levels by using this data along with data from other sources. Information about the kinds of loans taken out by first-time homebuyers is also included in this report. Every month, the Census Bureau conducts official new home sales estimates. New house sales are included in those statistics at the time of contract signing, which usually occurs at the same time as the mortgage application. VARIABLE, GIG INCOME MAY IMPROVE CONSUMER'S ACCESS TO CREDIT O ne of the most crucial parts of underwriting is making sure a prospective borrower has a reli- able source of income that enables them to pay back their mortgage loan, accord- ing to Khristi Waters, Senior Director of Single-Family Credit Risk Policy, and Li-Ning Huang, Principal of Economic and Strategic Research Market Research, at Fannie Mae. The industry experts offered their insight on borrower income, homeownership, credit access, and more. Guaranteeing that a prospective borrower has a reliable source of income so they can pay back their mortgage loan is essential to promoting sustainable homeownership. Leveraging all available income sources could assist a borrower get approved for a mortgage loan and making the move to homeownership, especially given the increase in interest rates and home costs. The intricacy of examining a borrow- er's income to make sure it is steady and likely to stay that way can vary from sim- pler situations, such as when salaried em-