MBA: February New Home Purchase Applications Up 6%
MBA NewsLink Staff
Mortgage Bankers Association Builder Applications Survey data for February show mortgage applications for new home purchases increased by 6 percent, unadjusted, from January and by 3 percent, unadjusted, from a year ago.
By product type, conventional loans composed 69.0 percent of loan applications, FHA loans composed 17.9 percent, RHS/USDA loans composed 0.6 percent and VA loans composed 12.5 percent. The average loan size of new homes increased from $334,532 in January to $340,692 in February.
"The housing market remains poised for a strong spring, with last month's increase in builder applications likely leading to a healthy 7 percent year-over-year rise in new home sales," said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. "We are starting to see signs of more new residential construction and inventory, which increases buying opportunities for the many home shoppers who have been hampered by the ongoing lack of supply."
Kan added slowing home-price growth, combined with stronger wage gains and lower mortgage rates, "is translating to improving affordability conditions for spring buyers."
MBA estimated new single-family home sales at a seasonally adjusted annual rate of 690,000 units in February, a decrease of 3.2 percent from the January pace of 713,000 units. On an unadjusted basis, MBA estimated 59,000 new home sales in February, an increase of 9.3 percent from 54,000 new home sales in January.
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.