WASHINGTON, D.C. (March 14, 2019) – The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for February 2019 shows mortgage applications for new home purchases increased 3 percent compared from a year ago. Compared to January 2019, applications increased by 6 percent. This change does not include any adjustment for typical seasonal patterns.
“The housing market remains poised for a strong spring, with last month’s increase in builder applications likely leading to a healthy 7 percent year-over-year rise in new home sales,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “We are starting to see signs of more new residential construction and inventory, which increases buying opportunities for the many home shoppers who have been hampered by the ongoing lack of supply.”
Added Kan, “Slowing home-price growth, combined with stronger wage gains and lower mortgage rates, is translating to improving affordability conditions for spring buyers.”
MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 690,000 units in February 2019, based on data from the BAS. 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 seasonally adjusted estimate for February is a decrease of 3.2 percent from the January pace of 713,000 units. On an unadjusted basis, MBA estimates that there were 59,000 new home sales in February 2019, an increase of 9.3 percent from 54,000 new home sales in January.
By product type, conventional loans composed 69.0 percent of loan applications, FHA loans composed 17.9 percent, RHS/USDA loans composed 0.6 percent and VA loans composed 12.5 percent. The average loan size of new homes increased from $334,532 in January to $340,692 in February.
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.
For additional information on MBA’s Builder Applications Survey, please click here.