March New Home Purchase Mortgage Applications Up 10%
The Mortgage Bankers Association said mortgage applications for new home purchases in March increased by 10 percent from February and by 0.6 percent from a year ago.
The MBA Builder Applications Survey estimated new single-family home sales, which has consistently been a leading indicator of the U.S. Census Bureau’s New Residential Sales report, ran at a seasonally adjusted annual rate of 666,000 units in March, based on data from the BAS, a decrease of 3.2 percent from the February pace of 688,000 units. On an unadjusted basis, MBA estimated 65,000 new home sales in March, an increase of 6.6 percent from 61,000 new home sales in February.
By product type, conventional loans composed 66.4 percent of loan applications, FHA loans composed 22.6 percent, RHS/USDA loans composed 0.3 percent and VA loans composed 10.7 percent. The average loan size of new homes increased from $406,953 in February to $407,015 in March.
“Low for-sale inventory continues to constrain sales, along with mortgage rates that remain above 6 percent,” said Joel Kan, MBA Vice President and Deputy Chief Economist. “MBA’s estimate for new home sales was down three percent from the previous month. New home sales will be key to the housing market recovery in 2023 as they account for an increasing share of purchase activity as home builders maintain construction levels and offer concessions for buyers. On the other hand, existing home inventory remains low as many current homeowners are locked-in to their homes with a low mortgage rate.”
The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors. Changes do not include adjustments for typical seasonal patterns.
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.