MBA: October Applications for New Home Purchases Down
Mortgage Bankers Association Builder Application Survey data for October show mortgage applications for new home purchases fell by 8 percent from September.
The change does not include any adjustment for typical seasonal patterns. By product type, conventional loans composed 67.2 percent of loan applications, FHA loans composed 19.2 percent, RHS/USDA loans composed 1.0 percent and VA loans composed 12.7 percent. The average loan size of new homes decreased from $324,884 in September to $320,881 in October.
“On top of normal seasonal slowdown, the October decline in mortgage applications to builder affiliates was likely amplified by some applications being pulled forward into September ahead of the implementation of the Know Before You Owe Rule on October 3,” said MBA Vice President of Economics and Research Lynn Fisher. “Despite the decrease, our estimate of new single-family housing sales for October was up more than 7 percent from a year ago.”
MBA estimated new single-family home sales ran at a seasonally adjusted annual rate of 495,000 units in October. The seasonally adjusted estimate for October represents a decrease of 9.7 percent from September’s pace (548,000 units). On an unadjusted basis, MBA estimated 39,000 new home sales in October, an decrease of 7.1 percent from 42,000 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 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.
