The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for September 2020 shows mortgage applications for new home purchases increased 38.2 percent compared from a year ago. Compared to August 2020, applications decreased by 5 percent. This change does not include any adjustment for typical seasonal patterns.
“The strong year-over-year results for non-seasonally adjusted new home sales applications – up 38 percent – and estimated home sales – up 20 percent – are indicative of the fundamental strength seen in the housing market since the spring. Demand for newly built homes is strong, as many buyers appear to seek more space for work, in-home schooling, and leisure,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “However, the moderation in the seasonally adjusted sales pace the last two months could mean that demand has slowed recently – likely because of tight inventory conditions and the slowing improvement in the job market.”
Added Kan, “MBA estimates that September new home sales slowed slightly from August but remained well ahead of 2019’s pace.”
MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 869,000 units in September 2020, 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 September is a decrease of 0.2 percent from the August pace of 871,000 units. On an unadjusted basis, MBA estimates that there were 67,000 new home sales in September 2020, a decrease of 1.5 percent from 68,000 new home sales in August.
By product type, conventional loans composed 71.3 percent of loan applications, FHA loans composed 17.8 percent, RHS/USDA loans composed 0.8 percent and VA loans composed 10.1 percent. The average loan size of new homes increased from $348,576 in August to $354,316 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 Application Survey, please click here.