Mortgage Applications for New Home Purchases Dip by 14 Percent in August

The Mortgage Bankers Association's (MBA) Builder Application Survey (BAS) data for August 2013 showed that mortgage applications for new home purchases decreased by 14 percent relative to the previous month. This change did not include any adjustment for typical seasonal patterns. By product type, conventional loans composed 67.8 percent of loan applications, FHA loans composed 17.3 percent, RHS/USDA loans composed one percent and VA loans composed 13.9 percent. The average loan size of new homes decreased from $288,382 in July to $284,392 in August. Utilizing information from the BAS, as well as assumptions regarding market coverage and other factors, MBA estimates that sales of new single-family homes were running at a seasonally adjusted annual rate of 424,000 in August 2013. On an unadjusted basis, the MBA estimates that there were 35,000 new home sales in August 2013. MBA’s Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country. Utilizing 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. This 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. In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.