February Sees Spike in New Home Apps

The Mortgage Bankers Association (MBA) estimates sales of new single-family homes were running at a seasonally adjusted annual rate of 533,000 units in February 2014, based on data from MBA’s Builder Applications Survey (BAS). The estimated sale pace for February is an increase of one percent from the revised January pace of 527,000 units. The sales pace for January was initially reported at 543,000 units. On an unadjusted basis, the MBA estimates that there were 43,000 new home sales in February 2014, an increase of 13 percent from 38,000 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. Mortgage applications for new home purchases increased by 12 percent relative to the previous month. This change does not include any adjustment for typical seasonal patterns. By product type, conventional loans composed 65.1 percent of loan applications, FHA loans composed 16.5 percent, RHS/USDA loans composed 5.3 percent and VA loans composed 13 percent. The average loan size of new homes increased from $289,358 in January to $295,008 in February. 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.