MBA: March New Home Applications Rise Again

Mortgage Bankers Association Builder Application Survey data for March show mortgage applications for new home purchases increased by 17 percent from February.

The change does not include any adjustment for typical seasonal patterns.

By product type, conventional loans composed 67.5 percent of loan applications, FHA loans composed 18.7 percent, RHS/USDA loans composed 0.7 percent and VA loans composed 13.0 percent. The average loan size of new homes increased from $328,370 in February to $339,296 in March.

“Rising prices for existing homes and a strong job market are making the math work for new construction,” said MBA Vice President of Research and Economics Lynn Fisher. “In March, the Builder Application Index reached its highest level since its inception in 2012 and was more than 18 percent higher than one year ago. During the last three years, peak application activity for new homes has taken place in March and April suggesting the trend should continue next month.”

MBA estimated new single-family home sales ran at a seasonally adjusted annual rate of 574,000 units in March, based on data from the BAS. The seasonally adjusted estimate for March represents an increase of 5.5 percent from February (544,000 units). On an unadjusted basis, MBA estimated 54,000 new home sales in March, an increase of 14.9 percent from 47,000 new home sales in February.

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 Application 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/forecasts-data-and-reports/single-family-research/servicing-operations-study-and-forum-for-prime-and-specialty-servicers-x75411.