MBA: February New Home Purchase Mortgage Applications Up 26% From Year Ago
Despite falling by 1 percent from January, mortgage applications for new home purchases increased by nearly 26 percent from a year ago, the Mortgage Bankers Association reported this morning.
The MBA Builder Applications Survey said by product type, conventional loans composed 69.3 percent of loan applications in February, FHA loans composed 18.5 percent, RHS/USDA loans composed 0.8 percent and VA loans composed 11.4 percent. The average loan size of new homes decreased from $346,140 in January to $340,169 in February.
Changes do not include any adjustment for typical seasonal patterns.
“Despite a decrease in February new applications and estimated new home sales, the year-over-year trends were strong, with new applications increasing 26 percent, and our estimate of new home sales increasing 8 percent,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting.
Looking ahead, however, Kan noted “significant uncertainty regarding how the coronavirus epidemic will impact the housing market, and some of January’s record-level activity could have been attributed to the warmer winter weather, lower mortgage rates, and the tight inventory of existing homes on the market – especially in lower price tiers.”
MBA estimated new single-family home sales at a seasonally adjusted annual rate of 746,000 units in February, based on data from the BAS, a decrease of 13.8 percent from January (865,000 units). On an unadjusted basis, MBA estimated 64,000 new home sales in February, a decrease of 3 percent from 66,000 new home sales in January.
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 https://www.mba.org/news-research-and-resources/research-and-economics/single-family-research/builder-applications-survey.
