MBA Chart of the Week: Year-Over-Year Change in Builder Applications Survey

Source: MBA Builder Applications Survey.

The MBA Builder Applications Survey Index declined by 7.5 percent in September relative to the prior year, the first year over year decline in the index in more than three years.   

Relative to August, the index declined by 20 percent in large part due to the impacts of hurricane activity.  Monthly applications fell by 37 percent in Florida and 11 percent in Texas, with these states accounting for a large share of the applications in the survey.   

The Builder Applications Survey tracks application volume from mortgage subsidiaries of home builders across the country. Starting in 2014, the BAS index increased by about 10 percent over the year prior and that pace of growth nearly doubled in 2015, with the index increasing by 19 percent. Applications for new homes decelerated to 8 percent year over year growth and to 7 percent for the year to date through August compared to the same period in 2016.   

Just prior to the hurricanes, the count of unfilled construction jobs around the country reached its highest level since prior to the recession. The flow of workers to areas affected by the hurricanes will further exacerbate labor shortages in the near term, especially throughout the southern areas of the U.S., delaying housing starts and other construction. Labor shortages are poised to put the home building industry under pressure to meet accumulating demand for new homes in 2018, raising wages and the costs of new construction.  

(Lynn Fisher is vice president of research and economics with MBA; she can be reached at lfisher@mba.org. Joel Kan associate vice president of economic forecasting with MBA; he can be reached at jkan@mortgagebankers.org. Anh Doan is senior financial analyst with MBA. She can be reached at adoan@mortgagebankers.org.)