MBA: May New Home Purchase Applications Up 0.1%

Mortgage applications for new home purchases increased by 0.1 percent in May from April and by 20.1 percent from a year ago, the Mortgage Bankers Association reported this morning.

The MBA Builder Applications Survey said by product type, conventional loans composed 69.4 percent of loan applications, FHA loans composed 17.9 percent, RHS/USDA loans composed 0.7 percent and VA loans composed 12 percent. The average loan size of new homes decreased from $338,745 in April to $330,311 in May.

“Purchase activity strengthened in May, with new home mortgage applications and our estimate of new home sales both showing increases compared to a year ago, at 20 percent and 15 percent, respectively,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “The average loan size for new home applications decreased almost 3 percent, signaling the ongoing moderation in home prices and a shift to building lower-priced homes. Declining mortgage rates and more new entry-level supply are good news for the housing market this summer.”

Changes do not include any adjustment for typical seasonal patterns.

MBA estimated new single-family home sales at a seasonally adjusted annual rate of 727,000 units in May, an increase of 0.7 percent from the April pace of 722,000 units. On an unadjusted basis, MBA estimated 69,000 new home sales in May, unchanged from April. 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 Applications 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