Mortgage applications for new home purchases increased 10 percent in the past year, according to data included in the Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for June 2017.
However, such applications decreased by 4 percent in June from May 2017, not adjusting for typical seasonal patterns.
“We are at the part of the season where housing market activity normally begins to slacken and this was true for mortgage applications for new homes in June,” MBA Vice President of Research and Economics Lynn Fisher said in a press release. “That said, activity was up by 10 percent relative to one year ago. The shortage of existing housing supply should keep pressure on prices and new homebuilding throughout the balance of this year and into next. The June application data leads us to believe that new home sales in June will come in at 628,000 units on a seasonally adjusted basis which is 18 percent higher than for the same period last year.”
Total loan applications were comprised of 70 percent conventional loans, 16.7 percent Federal Housing Administration loans, 1.3 percent Rural Housing Service or U.S. Department of Agriculture loans and 12 percent Veterans Administration loans, according to the BAS. The average loan price for new homes increased to $327,833 from $324,844 between May and June.
The MBA estimates that new single-family home sales were running at a seasonally-adjusted annual rate of 628,000 units in June 2017. 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 association expects to see a 3.8 percent increase in its seasonally-adjusted estimate for June, compared to the May pace of 605,000 units. On an unadjusted basis, the MBA estimates that there were 55,000 new home sales in June 2017, a 3.5 percent decrease from 57,000 new home sales in May.
The survey tracks application volume from mortgage subsidiaries of home builders throughout the country. Utilizing this data, along with information from other sources, the association is able to estimate new home sale volumes at the national, state and metro levels. This data also provides insight regarding the types of loans new home buyers are using.