Applications for mortgages to purchase newly constructed homes dropped by 6 percent in August according to the Mortgage Bankers Association (MBA). The data, compiled from MBA’s Builder Application Survey (BAS) is not adjusted to account for seasonal patterns.
MBA estimates that new home sales in August were running at a seasonally adjusted annual rate of 524,000 units, down 1.9 percent from the July rate of 534,000 units. On an unadjusted estimate MBA estimates there were 41,000 new homes sold in August, a 3,000 unit decrease, or 6.8 percent, from July. The average loan size of new homes increased from $316,995 in July to $317,035 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.
MBA’s Vice President of Research and Economics Lynn Fisher said new home purchase applications still were 19 percent higher than a year earlier, consistent with patterns seen throughout 2015. He called the July to August decrease “seasonally-driven.”
Conventional loans composed 68.5 percent of new home purchase mortgage applications and FHA loans accounted for 19.0 percent. VA loans made up 11.6 percent of the total and RHS/USDA loans 0.9 percent.
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 gives an early estimate of new home sales volumes at the national, state, and metro level. 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.
Reference Mortgage News Daily
Jonathan Burdick-Executive Vice President – Sales/Lending