March New Home Purchase Mortgage Applications Strong
The Mortgage Bankers Association’s Builder Applications Survey for March reported mortgage applications for new home purchases increased by 7 percent from a year ago. and by 12 percent from February.
By product type, conventional loans composed 70.9 percent of loan applications, FHA loans composed 14.8 percent, RHS/USDA loans composed 4.4 percent and VA loans composed 9.9 percent. The average loan size of new homes increased from $370,679 in February to $374,353 in March, the highest loan size in survey history.
The survey does not include adjustment for typical seasonal patterns.
“New home purchase application activity is typically strong in March, and this year was no different,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Applications strongly increased on a monthly and annual basis.”
MBA estimated new single-family home sales at a seasonally adjusted annual rate of 714,000 units in March, based on data from the BAS, a decrease of 4.5 percent from the February pace of 748,000 units. On an unadjusted basis, MBA estimates 72,000 new home sales in March, an increase of 10.8 percent from 65,000 new home sales in February.
“MBA’s estimate of new home sales declined by more than 4 percent last month, as we continue to see increasing home prices and a low number of homes on the market, caused in part by increased challenges facing homebuilders,” Kan said. Supply chain delays have led to more expensive building materials and delayed deliveries, and these have made it more difficult for builders to keep up with the strong demand for buying a home seen in most of the country this spring.”
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 the MBA Builder Applications Survey, click here.