April New Home Purchase Mortgage Applications Down 5%
Mortgage applications for new home purchases fell by 5 percent in April from Month but rose by 7.5 percent from a year ago, the Mortgage Bankers Association reported this morning.
The April MBA Builder Applications Survey reported by product type, conventional loans composed 71.6 percent of loan applications, FHA loans composed 15.1 percent, RHS/USDA loans composed 1.2 percent and VA loans composed 12.1 percent. The average loan size of new homes decreased to $336,870 in April from $337,597 in March.
This change does not include any adjustment for typical seasonal patterns.
“Applications for new home purchases slowed in April 2018 compared to March, decreasing 5 percent on an unadjusted basis, during a month where we typically expect an increase in new home purchase activity,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Despite a strong economy and job market, the decrease in April was likely due to a combination of rising mortgage rates and slow new construction activity, as builders still face a shortage of skilled labor and increasing materials costs, among other challenges.”
MBA estimated new single-family home sales at a seasonally adjusted annual rate of 656,000 units in April, a decrease of 3.8 percent from the March pace of 682,000 units. On an unadjusted basis, MBA estimated 63,000 new home sales in April, a decrease of 3.1 percent from 65,000 new home sales in March.
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.
