New Home Applications Fall for 3rd Straight Month

January 21, 2016

Mortgage Bankers Association Builder Application Survey data for December show mortgage applications for new home purchases decreased by 5 percent from November, the third consecutive monthly drop.

The report did not include adjustment for typical seasonal patterns.

By product type, conventional loans composed 68.0 percent of loan applications, FHA loans composed 18.5 percent, RHS/USDA loans composed 1.0 percent and VA loans composed 12.6 percent. The average loan size of new homes increased from $320,854 in November to $333,182 in December.

MBA Vice President of Research and Economics Lynn Fisher called the results “mixed, with some lenders seeing steady or slightly increasing application levels while others saw declines.”

MBA estimated new single-family home sales ran at a seasonally adjusted annual rate of 480,000 units in December, a decrease of 8.4 percent from 524,000 units in November. On an unadjusted basis, MBA estimated 34,000 new home sales in December, a decrease of 8.1 percent from 37,000 new home sales in November.

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.