MBA: June New Home Purchase Applications Down From May, Up 18% from Year Ago

MBA NewsLink Staff

July 11, 2019


The Mortgage Bankers Association Builder Application Survey data for June show mortgage applications for new home purchases fell by 14 percent from May, but rose by nearly 18 percent from a year ago.

By product type, conventional loans composed 68.7 percent of loan applications, FHA loans composed 18.0 percent, RHS/USDA loans composed 0.6 percent and VA loans composed 12.7 percent. The average loan size of new homes decreased from $330,311 in May to $329,593 in June.

Changes do not include any adjustment for typical seasonal patterns.

"Ongoing concerns about economic growth and trade policy likely kept some potential buyers out of the market despite lower mortgage rates," said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. "Our seasonally adjusted estimate of new home sales was down in June after two of the strongest months in the survey's history dating back to 2013, but remained higher than a year ago. The average loan amount for new home purchase applications fell slightly to its lowest level since November 2018, as home price growth continued to slow in many markets and purchase transactions have shifted away from the higher end of the price spectrum."

MBA estimated new single-family home sales at a seasonally adjusted annual rate of 646,000 units in June, a decrease of 11.1 percent from the May pace of 727,000 units. On an unadjusted basis, MBA estimated 58,000 new home sales in June, a decrease of 15.9 percent from 69,000 new home sales in May.

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 MBA Builder Applications Survey tracks application volume from mortgage subsidiaries of home builders across the country. Using these data, as well as data from other sources, MBA provides an early estimate of new home sales volumes at the national, state and metro level. These data also provide information regarding types of loans used by new home buyers. Official new home sales estimates are conducted by the Census Bureau on a monthly basis. In those 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, click https://www.mba.org/news-research-and-resources/research-and-economics/single-family-research/builder-applications-survey.

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