MBA: September Builder Applications Down 7%

Mortgage Bankers Association Builder Application Survey data for September show mortgage applications for new home purchases decreased by 7 percent from August but increased by 3 percent from a year ago.   

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

By product type, conventional loans composed 68.8 percent of loan applications, FHA loans composed 17.5 percent, RHS/USDA loans composed 0.9 percent and VA loans composed 12.7 percent. The average loan size of new homes increased from $325,224 in August to $326,998 in September.  

“After a strong start in 2016 and despite evidence of increasing costs, mortgage applications for new homes have maintained a pace modestly above 2015 rates,” said MBA Vice President of Research and Economics Lynn Fisher. “The monthly decline in mortgage applications in September is largely attributable to typical declines in building activity this time of year. That said, builders are facing headwinds from rising labor costs. Looking forward, year over year growth in applications is likely to remain muted for the balance of 2016.”

MBA estimated new single-family home sales at a seasonally adjusted annual rate of 593,000 units in September, a decrease of 1.3 percent from August (601,000). On an unadjusted basis, MBA estimated 44,000 new home sales in September, a decrease of 8.3 percent from 48,000 new home sales in July. 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