October New Home Purchase Mortgage Applications Increase 8 Percent Year over Year
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WASHINGTON, D.C. (November 15, 2016) - The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for October 2016 shows mortgage applications for new home purchases increased 8 percent relative to October 2015. Compared to September 2016, applications decreased by 2 percent. This change does not include any adjustment for typical seasonal patterns.
"Mortgage applications for new homes are down 2.3 percent over the month but are up 8.3 percent compared to last year," said Lynn Fisher, MBA's Vice President of Research and Economics. "Year to date, the market share of builder applications has grown for conventional loans from 67.1 percent last year to 67.9 percent in 2016 and VA loans which increased from 12.5 percent last year to 13.1 percent in 2016. The share of mortgage applications for new homes fell for FHA and RHS loans to 18.3 percent and 0.7 percent respectively."
By product type, conventional loans composed 67.7 percent of loan applications, FHA loans composed 18.4 percent, RHS/USDA loans composed 1.0 percent and VA loans composed 12.9 percent in October. The average loan size of new homes increased from $326,998 in September to $329,634 in October.
The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 547,000 units in October 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 October is a decrease of 7.8 percent from the September pace of 593,000 units. On an unadjusted basis, the MBA estimates that there were 44,000 new home sales in October 2016, unchanged from 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.