MBA: March New Home Purchase Applications Up Sharply

Mortgage Applications for new home purchases surged in March to the highest point since inception of the Mortgage Bankers Association’s Builder Application Survey, MBA reported this morning.

The survey showed March mortgage applications for new home purchases increased by 23 percent from February and by 6.7 percent from a year ago to the highest level since its inception in August 2012. The data do not include any adjustment for typical seasonal patterns.

By product type, conventional loans composed 67.5 percent of loan applications, FHA loans composed 18.6 percent, RHS/USDA loans composed 1.0 percent and VA loans composed 12.8 percent. The average loan size of new homes decreased from $330,208 in February to $328,192 in March. Looking at the full distribution of applications, nearly two-thirds of applications for new homes in our survey have loan sizes between $200,000 and $400,000.

“The pickup from a fairly modest February showing suggests that developers are finding ways to bring new product on line to help supplement otherwise low inventories of existing homes for sale in the U.S.,” said MBA Vice President of Research and Economics Lynn Fisher. “In contrast to the increasing trend in average loan size in our Weekly Application Survey which reports on applications for both new and existing homes, the average loan size for new homes in March from the Builder survey was unchanged from a year ago.”

MBA estimated new single-family home sales came in at a seasonally adjusted annual rate of 670,000 units in March, an increase of 14.3 percent from February (586,000 units). On an unadjusted basis, MBA estimated 62,000 new home sales in March, an increase of 21.6 percent from 51,000 in February.

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.