Mortgage applications for new-home purchases increased by 16.6% in May compared with the same month a year ago, according to the Mortgage Bankers Association (MBA) Builder Application Survey (BAS). On a month-over-month basis, applications increased by 8% in May.
“Purchase activity for newly built homes was strong in May, with builders continuing to bring homes to the market and buyers keen to act on available units,” says MBA vice president and deputy chief economist Joel Kan. “Applications for purchase loans were up on a monthly basis and increased annually for the fourth consecutive month. Our estimate of new-home sales also jumped in May, up 16% to the fastest pace of new-home sales in 15 months.”
According to the MBA, conventional loans composed 67% of applications last month; FHA loans, 22.8%; VA loans, 10%; and RHS/USDA loans, 0.3%. The average loan size of new homes increased $1,825 from April to $403,581 in May.
MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 755,000 units in May based on data from the BAS. The seasonally adjusted estimate for May was up 16.3% from April’s pace. On an unadjusted basis, MBA estimates there were 64,000 new-home sales in May, a 10.3% increase from April.
“The new-home sales segment continues to gather momentum, growing at a pace of 5% compared to a year ago, while existing-home sales in recent months continue to experience annual declines of more than 20% on a nonseasonally adjusted basis,” Kan says. “These results were also broadly in line with the Census data showing an uptick in residential housing starts and permitting in recent months.”
MBA’s BAS tracks application volume from mortgage subsidiaries of home builders across the country. Using 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.
