MBA: October New Home Purchase Mortgage Apps Rebound

The Mortgage Bankers Association this morning reported October mortgage applications for new home purchases rebounded, jumping by 23 percent from September and by 16.1 percent from a year ago.

MBA Builder Application Survey data for October reported by product type, conventional loans composed 71.8 percent of loan applications, FHA loans composed 15.1 percent, RHS/USDA loans composed 1.4 percent and VA loans composed 11.7 percent. The average loan size of new homes increased from $334,722 in September to $339,534 in October.

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

“October registered the strongest growth rate in applications so far this year, following September’s hurricane related decrease,” said MBA Vice President of Research and Economics Lynn Fisher. “Overall, applications reached near August levels. Texas mirrored the national pattern, and Florida fell just 4 percent short of its August total.”

Fisher noted the Builder Application Survey does not measure activity in Puerto Rico.”

MBA estimated new single-family home sales at a seasonally adjusted annual rate of 659,000 units in October, an increase of 15.4 percent from the September pace of 571,000 units, based on data from the BAS. On an unadjusted basis, MBA estimated 53,000 new home sales in October, an increase of 26.2 percent from 42,000 new home sales in September.

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.