MBA: May New Home Purchase Mortgage Applications Down 4%
Mortgage applications for new home purchases fell again in May and from a year ago, the Mortgage Bankers Association reported this morning.
The MBA Builder Application Survey for May 2018 reported mortgage applications for new home purchases decreased by 4 percent from April and by 0.5 percent from a year ago.
By product type, conventional loans composed 71.1 percent of loan applications, FHA loans composed 15.8 percent, RHS/USDA loans composed 1.0 percent and VA loans composed 12.1 percent. The average loan size of new homes increased from $336,870 in April to $337,515 in May. This change does not include any adjustment for typical seasonal patterns.
“Despite strong demand, builders have not been able to ramp up the supply of new homes, as they face rising costs from key inputs such as lumber and having to raise wages to fill open positions,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Additionally, our estimate of new home sales declined in May, reaching its lowest level since December 2017.”
MBA estimated new single-family home sales at a seasonally adjusted annual rate of 626,000 units in May, a decrease of 4.6 percent from April (656,000). On an unadjusted basis, MBA estimated 60,000 new home sales in May, a decrease of 4.8 percent from 63,000 in April. On an unadjusted basis, new home sales were more than 5 percent higher from a year ago.
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.
