January New Home Purchase Mortgage Applications Increased 9.2 Percent Year over Year
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WASHINGTON, D.C. (February 14, 2017) - The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for January 2017 shows mortgage applications for new home purchases increased 9.2 percent compared to January 2016. Compared to December 2016, applications increased by 22 percent relative to the previous month. This change does not include any adjustment for typical seasonal patterns.
"As house prices continue to rise and inventories of homes available for sale remain low, it is not surprising that mortgage applications for new homes in January came in higher than a year ago," said Lynn Fisher, MBA's Vice President of Research and Economics. "Alongside relatively low supply, rising household incomes and favorable demographics should continue to bolster demand for new homes, despite rising interest rates, leading to modest growth in new home sales this year."
By product type, conventional loans composed 67.2 percent of loan applications, FHA loans composed 18.6 percent, RHS/USDA loans composed 1.1 percent and VA loans composed 13 percent. The average loan size of new homes decreased from $331,354 in December to $329,806 in January.
MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 562,000 units in January 2017, 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 January is an increase of 17.6 percent from the December pace of 478,000 units. On an unadjusted basis, MBA estimates that there were 44,000 new home sales in January 2017, a increase of 25.7 percent from 35,000 new home sales in December.
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.