April New Home Purchase Mortgage Applications Drop 4.3 Percent Year over Year
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WASHINGTON, D.C. (May 15, 2017) - The Mortgage Bankers Association (MBA) Builder Applications Survey (BAS) data for April 2017 shows mortgage applications for new home purchases decreased 4.3 percent compared to April 2016. Compared to March 2017, applications decreased by 20 percent relative to the previous month. This change does not include any adjustment for typical seasonal patterns.
"For the first time this year, mortgage applications for new homes in April were lower than the same month a year ago. Mortgage applications for new homes fell more than 20 percent in April after peaking in March, as they have the past 2 years," said Lynn Fisher, MBA's Vice President of Research and Economics. "A relatively strong March may have pulled forward some applications from April, exacerbating the normal seasonal fall-off. On net, year to date applications for new homes are running about 3 percent above the same period from 2016. Despite steady demand for housing, homebuilders continue to face rising costs for labor and materials which will continue to moderate the pace of building."
By product type, conventional loans composed 68.5 percent of loan applications, FHA loans composed 17.7 percent, RHS/USDA loans composed 1.4 percent and VA loans composed 12.4 percent. The average loan size of new homes decreased from $328,192 in March to $326,284 in April.
The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 517,000 units in April 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 April is a decrease of 22.8 percent from the March pace of 670,000 units. On an unadjusted basis, the MBA estimates that there were 50,000 new home sales in April 2017, a decrease of 19.4 percent from 62,000 new home sales in March.
MBA's Builder Applications 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.