MBA: March Builder Applications Up 10% from February; Down 5% from Year Ago
Mortgage applications for new home purchases increased by 10 percent in March from February but fell by 5 percent from a year ago, the Mortgage Bankers Association reported Thursday in its Builder Applications Survey.
By product type, conventional loans composed 76.6 percent of loan applications, FHA loans composed 13.0 percent, RHS/USDA loans composed 0.2 percent and VA loans composed 10.2 percent. The average loan size of new homes increased from $432,359 in February to $436,151 in March.
This change does not include any adjustment for typical seasonal patterns.
“Mortgage applications for new home purchases increased in March, which is consistent with typical seasonal trends and a sign of strong underlying demand for housing,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Potential buyers have increasingly looked to new homes as an option, given the lack of existing homes for sale.”
Kan noted the average loan size continued to set record highs and reached $436,151. “Growth in applications for larger loans continued to dominate application activity,” he said.
The MBA estimate of new home sales declined for the fourth consecutive month, with activity down 5 percent compared to February. “Elevated home prices, rapidly increasing mortgage rates and higher costs and supply shortages for building materials are all affecting sales growth,” Kan said.
MBA estimated new single-family home sales at a seasonally adjusted annual rate of 752,000 units in March, based on data from the BAS, a decrease of 4.9 percent from the February pace of 791,000 units. On an unadjusted basis, MBA estimated 74,000 new home sales in March, a 12.1 percent increase from 66,000 new home sales in February.
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. Utilizing this 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 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.
Click here for additional information on the MBA Builder Applications Survey.