April New Home Purchase Mortgage Applications Increased 7.5 Percent Year over Year
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WASHINGTON, D.C. (May 10, 2018) - The Mortgage Bankers Association (MBA) Builder Applications Survey (BAS) data for April 2018 shows mortgage applications for new home purchases increased 7.5 percent compared to April 2017. Compared to March 2018, applications decreased by 5 percent. This change does not include any adjustment for typical seasonal patterns.
"Applications for new home purchases slowed in April 2018 compared to March, decreasing 5 percent on an unadjusted basis, during a month where we typically expect an increase in new home purchase activity. Despite the monthly decrease, application activity was still 7.5 percent higher than a year ago," said Joel Kan, Associate Vice President of Economic and Industry Forecasting. "Our estimate of new home sales decreased almost 4 percent from March to a seasonally adjusted annualized pace of 682,000 units. Despite a strong economy and job market, the decrease in April was likely due to a combination of rising mortgage rates and slow new construction activity, as builders still face a shortage of skilled labor and increasing materials costs, among other challenges."
By product type, conventional loans composed 71.6 percent of loan applications, FHA loans composed 15.1 percent, RHS/USDA loans composed 1.2 percent and VA loans composed 12.1 percent. The average loan size of new homes decreased from $337,597 in March to $336,870 in April.
The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 656,000 units in April 2018, 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 3.8 percent from the March pace of 682,000 units. On an unadjusted basis, the MBA estimates that there were 63,000 new home sales in April 2018, a decrease of 3.1 percent from 65,000 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.