MBA: August Builder Applications Up 5%
Mortgage Bankers Association Builder Application Survey data for August show mortgage applications for new home purchases increased by 5 percent from July but increased by 2.4 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 67.7 percent of loan applications, FHA loans composed 18.4 percent, RHS/USDA loans composed 0.7 percent and VA loans composed 13.2 percent. The average loan size of new homes decreased from $325,843 in July to $325,224 in August.
“Applications for new home purchase mortgages were up in August on an unadjusted basis following a sluggish July,” said MBA Vice President of Research and Economics Lynn Fisher.
MBA estimated new single-family home sales at a seasonally adjusted annual rate of 601,000 units in August, an increase of 11.3 percent from July (540,000). On an unadjusted basis, MBA estimated 48,000 new home sales in August, an increase of 6.7 percent from 45,000 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.
Fisher noted new home purchase applications increased 5 percent over the month and increased more than 14 percent from a year ago. “Our estimate of seasonally adjusted new home sales for August reached 601,000 sales, the highest level observed in the MBA survey since it began in 2012,” she said. “While our new home sales estimates have trailed the recent Census data, the increase in our series in August, which derives from a different source of data compared to the Census, provides some corroboration that single-family building activity has remained strong even as the summer winds down. Our sense is that builders have been attempting to catch up with demand in the face of labor shortfalls and other limiting factors in various parts of the country.”
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.
