Apps for New Home Purchases Down Nine Percent in August

The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for August 2014 shows mortgage applications for new home purchases decreased by nine percent relative to the previous month. This change does not include any adjustment for typical seasonal patterns. By product type, conventional loans composed 68.9 percent of loan applications, FHA loans composed 15.7 percent, RHS/USDA loans composed 1.0 percent and VA loans composed 14.3 percent. The average loan size of new homes increased from $297,253 in July to $300,443 in August. The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 424,000 units in August 2014, based on data from the BAS. 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 seasonally adjusted estimate for August is a decrease of 2.1 percent from the July pace of 433,000 units. On an unadjusted basis, the MBA estimates that there were 34,000 new home sales in August 2014, a decrease of 8.1 percent from 37,000 new home sales in July. Compared to last year, the MBA estimate of unadjusted new home sales are down 2.9 percent from 35,000 new home sales in August 2013.