
MBA: New Home Purchase Mortgage Apps Down 18% in December, Up 8% from Year Ago
The Mortgage Bankers Association said December mortgage applications for new home purchases increased by 7.8 percent from a year ago but fell by 18 percent from November.
The MBA Builder Application Survey reported by product type, conventional loans composed 72.5 percent of loan applications, FHA loans composed 15.1 percent, RHS/USDA loans composed 2.3 percent and VA loans composed 10.1 percent. The average loan size of new homes increased from $337,427 in November to $339,203 in December.
Data do not include any adjustment for typical seasonal patterns.
“After playing catch-up for two months following the slowdown caused by Hurricanes Harvey, Irma and Maria, mortgage applications for new homes declined in December to a more normal growth rate of 7.8% on a year over year basis,” said MBA Vice President of Research and Economics Lynn Fisher.
MBA estimated new single-family home sales ran at a seasonally adjusted annual rate of 554,000 units in December, based on data from the BAS, a decrease of 16.4 percent from November (663,000 units). On an unadjusted basis, MBA estimated 40,000 new home sales in December, a decrease of 14.9 percent from 47,000 in November.
The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.
“Looking at all of 2017, applications increased by 7.1 percent compared to 2016,” Fisher said. Based on December applications, we forecast that new home sales fell in December but remained nearly 16 percent higher than a year ago, and we are anticipating only modest year over year growth for new home sales in 2018. Despite robust demand, a lack of labor and land will continue to constrain homebuilders.”
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.