MBA: November Builder Applications Survey Up 27% from Year Ago; Down 17% from October

Mortgage applications for new home purchases increased 27.1 percent in November compared to a year ago, the Mortgage Bankers Association’s Builder Applications Survey reported Thursday.

Applications decreased by 17 percent in November compared to October. This change does not include any adjustment for typical seasonal patterns.

MBA estimated new single-family home sales were running at a seasonally adjusted annual rate of 688,000 units in November based on data from the BAS. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors. 

“Applications for new home purchases continue to outperform last year’s pace, and November was no different,” said MBA Associate Vice President of Economic and Industry Forecasting Joel Kan. “On a seasonally adjusted monthly basis, new applications decreased to the slowest pace since June 2019, which points to some weakness as this year comes to an end.”

Kan said the healthy job market, increased new home construction and rising household formation support growth heading into 2020, “but affordability challenges in many markets and economic uncertainty pose as headwinds,” he said.

The seasonally adjusted estimate for November represents a decrease of 13 percent from October’s 791,000-unit annual pace. On an unadjusted basis, MBA estimated there were 51,000 new home sales in November, a 16.4 percent decrease from 61,000 new home sales in October.

By product type, conventional loans composed 69.2 percent of loan applications, FHA loans made up 18 percent, RHS/USDA loans composed 0.6 percent and VA loans were 12.2 percent. The average loan size of new homes increased from $335,235 in October to $337,943 in November.

MBA’s Builder Applications Survey tracks application volume from mortgage subsidiaries of home builders across the country. Using this 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 the types of loans used by new home buyers. Official new home sales estimates are conducted by the Census Bureau on a monthly basis. In that data, new home sales are recorded at contract signing, which typically coincides with the mortgage application. 

Click here for additional information on MBA’s Builder Applications Survey.