The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for September 2019 shows mortgage applications for new home purchases increased 34.2 percent compared to a year ago. Compared to August 2019, applications decreased by 8 percent. This change does not include any adjustment for typical seasonal patterns.
MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 725,000 units in September 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.
“Applications for new home purchases fell in September but remained 34.2 percent higher than a year ago, with our estimate for new home sales following a similar pattern. Last month’s slowdown was likely caused by ongoing economic and interest rate uncertainty, as well as the fact that homebuilders continue to grapple with high building costs and labor shortages,” said Joel Kan, Associate Vice President of Economic and Industry Forecasting. “Purchase applications this year for new and existing homes for sale have consistently outpaced year ago levels. This trend should continue in the final months of the year – especially considering how much higher rates were at the end of 2018.”
The seasonally adjusted estimate for September is a decrease of 7.6 percent from the August pace of 785,000 units. On an unadjusted basis, MBA estimates that there were 56,000 new home sales in September 2019, a decrease of 8.2 percent from 61,000 new home sales in August.
By product type, conventional loans composed 69.2 percent of loan applications, FHA loans composed 18.4 percent, RHS/USDA loans composed 0.9 percent and VA loans composed 11.6 percent. The average loan size of new homes decreased from $332,497 in August to $330,807 in September.
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.