MBA: August New Home Purchase Mortgage Apps Up 7%

Mortgage applications for new home purchases jumped by 7 percent in August from July and by 6.8 percent from a year ago, the Mortgage Bankers Association reported this morning in its monthly Builder Applications Survey.  

By product type, conventional loans composed 71.9 percent of loan applications, FHA loans composed 14.4 percent, RHS/USDA loans composed 0.9 percent and VA loans composed 12.7 percent. The average loan size of new homes increased from $329,483 in July to $334,940 in August, the highest level since the series began.  

Data do not include any adjustment for typical seasonal patterns.  

“Mortgage applications for new homes rebounded a bit in August as lower than expected interest rates and growth in existing home prices continue to fuel demand, sustaining year to date growth in applications of more than 7 percent compared to 2016,” said MBA Vice President of Research and Economics Lynn Fisher.  

Fisher noted more than one-third of applications for new homes in the August survey came from Florida and Texas. “It is unclear what impact hurricanes Harvey and Irma will have on housing starts in the region in coming months, but it is likely that recent new home sales will be delayed in breaking ground,” she said.  

MBA estimated new single-family home sales at a seasonally adjusted annual rate of 655,000 units in August, an increase of 16.5 percent from 562,000 units in July. On an unadjusted basis, MBA estimated 52,000 new home sales in August, an increase of 6.1 percent from 49,000 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.   

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.