MBA: May Applications for New Home Purchases Down Again
Mortgage Bankers Association Builder Application Survey data for May showed mortgage applications for new home purchases decreased by 6 percent from April, following an 11 percent decrease from April to March.
The change does not include any adjustment for typical seasonal patterns.
MBA said by product type, conventional loans composed 68.4 percent of loan applications, FHA loans composed 17.6 percent, RHS/USDA loans composed 0.6 percent and VA loans composed 13.4 percent. The average loan size of new homes increased from $325,233 in April to $328,032 in May.
“Despite applications being down in May, each month this year has seen positive year over year growth in mortgage applications for new homes, and we expect modest growth in housing starts to be reported later this week as the spring building season continues,” said MBA Vice President of Research and Economics Lynn Fisher. “While mortgage applications for new homes have declined almost 17 percent on an unadjusted basis from their peak in March of this year, applications in May remain 8 percent above their level one year ago.”
MBA estimated new single-family home sales at a seasonally adjusted annual rate of 488,000 units in May, based on data from the BAS, a 3 percent decrease April (503,000 units). On an unadjusted basis, MBA estimated 47,000 new home sales in May, a decrease of 2.1 percent from 48,000 in April.
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.
