October New Home Purchase Mortgage Applications Post 11% Monthly Gain
Mortgage applications for new home purchases rose by 11 percent in October from September but fell by 2.1 percent from a year ago, the Mortgage Bankers Association reported this morning.
The MBA Builder Applications Survey said by product type, conventional loans composed 70.9 percent of loan applications, FHA loans composed 17.1 percent, RHS/USDA loans composed 0.7 percent and VA loans composed 11.2 percent. The average loan size of new homes decreased from $333,086 in September to $331,732 in October.
Changes does not include any adjustment for typical seasonal patterns.
“While we have seen some monthly swings in new home sales in 2018, the year-to-date average sales pace is around seven percent higher than the same period in 2017,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. Additionally, the average loan size for a new home purchase application, at around $332,000, was at its lowest since July 2017. This is potentially a sign that there has been some additional inventory in the new home market, and that the rapid price growth in some geographies is starting to ease.”
MBA estimated new single-family home sales at a seasonally adjusted annual rate of 673,000 units in October, based on data from the BAS, an increase of 4.7 percent from September (643,000 units). On an unadjusted basis, MBA estimated 53,000 new home sales in October, an increase of 6 percent from 50,000 new home sales in September.
The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.
The MBA Builder Applications Survey tracks application volume from mortgage subsidiaries of home builders across the country. Using these data, as well as data from other sources, MBA provides an early estimate of new home sales volumes at the national, state and metro level. These data also provide information regarding types of loans used by new home buyers. Official new home sales estimates are conducted by the Census Bureau on a monthly basis. In those data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.
For additional information on MBA’s Builder Applications Survey, click https://www.mba.org/news-research-and-resources/research-and-economics/single-family-research/builder-applications-survey.
