MBA: August New Home Applications Up 9% From July, Down 17% from Year Ago
The Mortgage Bankers Association’s latest Builder Applications Survey reported mortgage applications for new home purchases increased by 9 percent in August from July but decreased by 17 percent from a year ago.
The changes do not include any adjustment for typical seasonal patterns.
By product type, conventional loans composed 75.1 percent of loan applications, FHA loans composed 13.8 percent, RHS/USDA loans composed 0.6 percent and VA loans composed 10.5 percent. The average loan size of new homes increased from $402,440 in July to $406,922 in August.
“Mortgage applications to purchase new homes were down in August compared to 2020’s late summer surge, but both mortgage applications and MBA’s estimate of new home sales jumped last month compared to July,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “While the new home construction market is a much smaller segment of the overall housing market, prospective buyers are increasingly turning to new homes because of the very low levels of existing homes for sale. Last month’s non-seasonally adjusted 9 percent increase in applications is an indication of greater than expected strength in demand, given that summer’s end is typically a slower period for new home purchases.”
MBA estimated new single-family home sales at a seasonally adjusted annual rate of 874,000 units in August, an increase of 12.2 percent from the July pace of 779,000 units. On an unadjusted basis, MBA estimated 71,000 new home sales in August, an increase of 10.9 percent from 64,000 new home sales in July.
“On a seasonally adjusted basis, new home sales jumped 12 percent in August to 874,000 units, the fastest pace of sales since January,” Kan said. This is consistent with improving homebuilder sentiment, as lumber prices continue to ease and demand for new homes remains strong. However, higher costs for materials, delivery delays, and growing labor shortages continue to pose as challenges and are ultimately pushing sales prices higher. The average loan size set another survey record at $406,922, and the share of loan applications for amounts greater than $400,000 accounted for over 40 percent of all applications, up from 28 percent a year ago.”
The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.
MBA’s Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country. Utilizing this data, as well as data from other sources, MBA is able to provide an early estimate of new home sales volumes at the national, state, and metro level. This data also provides 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 is typically coincident with the mortgage application
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 the MBA Builder Applications Survey, click here.