New home purchase mortgage applications have decreased 2.6 percent year-over-year but are up 14 percent from this past February, according to the Mortgage Bankers Association (MBA) Builder Application Survey (BAS) for March 2018.
The survey notes that the change does not include any adjustment for typical seasonal patterns.
“Applications taken for new home purchases decreased year over year in March,” MBA Associate Vice President of Economic and Industry Forecasting Joel Kan said in a press release. “We saw a strong January and February, and that may have pulled some activity forward. We did, however, see the third straight month-over-month increase, which is in line with the typical seasonal pattern at this time of the year. Our estimate of new home sales for March was 682,000 units, a rebound of almost 8 percent after a February decrease.”
Conventional loans accounted for 71.2 percent of total loan applications studied for the survey, while FHA loans made up 15.4 percent, Rural Housing Service (RHS)/U.S. Department of Agriculture (USDA) loans composed 1.4 percent and loans from the Department of Veterans Affairs accounted for 11.9 percent. The average loan size of new homes decreased from $338,078 in February to $337,597 in March.
MBA estimates that new single-family home sales were running at a seasonally adjusted annual rate of 682,000 units in March 2018, based on BAS data. The new home sales estimate is calculated using mortgage application information from the BAS, as well as assumptions based on market coverage and other factors.
The seasonally adjusted estimate for March is that new home sales will increase 7.9 percent from the February pace of 632,000 units. On an unadjusted basis, the MBA estimates that there were 65,000 new home sales in March 2018, an uptick of 18.2 percent from 55,000 new home sales in February.
The BAS tracks application volume from mortgage subsidiaries of home builders across the country, utilizing the data, as well as other sources, to provide an early estimate of new home sales volumes at the national, state and metropolitan level.
The 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. New home sales, for that data, are recorded at contract signing, which typically coincides with the mortgage application.