MBA: April New Home Purchase Applications Fall
Mortgage applications for new homes fell in April from March and from a year ago, the Mortgage Bankers Association reported this morning.
The MBA Builder Applications Survey for April showed mortgage applications for new home purchases decreased by 4.3 percent from a year ago. From March, applications fell by 20 percent. This change does not include any adjustment for typical seasonal patterns.
“For the first time this year, mortgage applications for new homes in April were lower than the same month a year ago,” said MBA Vice President of Research and Economics Lynn Fisher. “A relatively strong March may have pulled forward some applications from April, exacerbating the normal seasonal fall-off.”
On net, year to date applications for new homes are running 3 percent from a year ago. “Despite steady demand for housing, homebuilders continue to face rising costs for labor and materials which will continue to moderate the pace of building,” Fisher said.
By product type, conventional loans composed 68.5 percent of loan applications, FHA loans composed 17.7 percent, RHS/USDA loans composed 1.4 percent and VA loans composed 12.4 percent. The average loan size of new homes decreased from $328,192 in March to $326,284 in April.
MBA estimated new single-family home sales at a seasonally adjusted annual rate of 517,000 units in April, a decrease of 22.8 percent from the March pace of 670,000 units. On an unadjusted basis, MBA estimated 50,000 new home sales in April, a decrease of 19.4 percent from 62,000 new home sales in March.
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.
