Applications for New Home Purchases Increased in March
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WASHINGTON, D.C. (April 14, 2016) - The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for March 2016 shows mortgage applications for new home purchases increased by 17 percent relative to the previous month. This change does not include any adjustment for typical seasonal patterns.
"Rising prices for existing homes and a strong job market are making the math work for new construction. In March, the Builder Application Index reached its highest level since its inception in 2012 and was more than 18 percent higher than one year ago. During the last three years, peak application activity for new homes has taken place in March and April suggesting the trend should continue next month," said Lynn Fisher, MBA's Vice President of Research and Economics.
By product type, conventional loans composed 67.5 percent of loan applications, FHA loans composed 18.7 percent, RHS/USDA loans composed 0.7 percent and VA loans composed 13.0 percent. The average loan size of new homes increased from $328,370 in February to $339,296 in March.
MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 574,000 units in March 2016, 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 March is an increase of 5.5 percent from the February pace of 544,000 units. On an unadjusted basis, the MBA estimates that there were 54,000 new home sales in March 2016, an increase of 14.9 percent from 47,000 new home sales 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.