August New Home Purchase Mortgage Applications Decreased 4.6 Percent Year over Year
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WASHINGTON, D.C. (September 14, 2018) - The Mortgage Bankers Association (MBA) Builder Applications Survey (BAS) data for August 2018 show mortgage applications for new home purchases decreased 4.6 percent compared to August 2017. Compared to July 2018, applications decreased by two percent. This change does not include any adjustment for typical seasonal patterns.
The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 669,000 units in August 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.
"Our seasonally-adjusted estimate of new home sales increased five percent over the month, the second straight monthly increase. Low inventory of homes for sale has been an issue this year, and newly constructed units have been one way to ease the shortage. Growth in August was focused in the lower price tiers. In fact, for the first time in four months, monthly growth was driven by the lower half of the market, based on application size," said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting.
The seasonally adjusted estimate for August is an increase of five percent from the July pace of 637,000 units. On an unadjusted basis, the MBA estimates that there were 53,000 new home sales in August 2018, unchanged July.
By product type, conventional loans composed 71.4 percent of loan applications, FHA loans composed 15.6 percent, RHS/USDA loans composed 1.2 percent and VA loans composed 11.8 percent. The average loan size of new homes decreased from $337,775 in July to $332,801 in August.
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.