MBA: September New Home Purchase Mortgage Applications Down 5% from August; Up 38.2 Percent from Year Ago
The Mortgage Bankers Association’s Builder Applications Survey data for September shows mortgage applications for new home purchases increased by 38.2 percent from a year ago, unadjusted, but fell by 5 percent from August.
By product type, conventional loans composed 71.3 percent of loan applications, FHA loans composed 17.8 percent, RHS/USDA loans composed 0.8 percent and VA loans composed 10.1 percent. The average loan size of new homes increased from $348,576 in August to $354,316 in September.
“The strong year-over-year results for non-seasonally adjusted new home sales applications – up 38 percent – and estimated home sales – up 20 percent – are indicative of the fundamental strength seen in the housing market since the spring,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Demand for newly built homes is strong, as many buyers appear to seek more space for work, in-home schooling, and leisure.”
Kan noted, however, “moderation in the seasonally adjusted sales pace the last two months could mean that demand has slowed recently – likely because of tight inventory conditions and the slowing improvement in the job market. MBA estimates that September new home sales slowed slightly from August but remained well ahead of 2019’s pace.”
MBA estimated new single-family home sales at a seasonally adjusted annual rate of 869,000 units in September, based on data from the BAS, a decrease of 0.2 percent from the August pace of 871,000 units. On an unadjusted basis, MBA estimated 67,000 new home sales in September, a decrease of 1.5 percent from 68,000 new home sales in August.
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.