New home purchase mortgage applications in U.S increase in February
The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for February 2017 shows mortgage applications for new home purchases increased 2.2 percent compared to February 2016. Compared to January 2017, applications increased by 16 percent relative to the previous month. This change does not include any adjustment for typical seasonal patterns.
“The Builder Application Index posted a modest annual gain in February 2017. The bar was high as last February was a particularly strong month for applications, as was March 2016. The surprisingly strong employment numbers for the beginning of 2017 suggest that demand for new homes should continue to grow this year,” said Lynn Fisher, MBA’s Vice President of Research and Economics. “Additionally, based on the current reading, we expect seasonally adjusted new home sales to be up by about 8 percent in February compared to a year ago.”
By product type, conventional loans composed 66.5 percent of loan applications, FHA loans composed 18.6 percent, RHS/USDA loans composed 1.3 percent and VA loans composed 13.6 percent. The average loan size of new homes increased from $329,806 in January to $330,208 in February.
The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 586,000 units in February 2017, 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 February is an increase of 4.3 percent from the January pace of 562,000 units. On an unadjusted basis, the MBA estimates that there were 51,000 new home sales in February 2017, an increase of 15.9 percent from 44,000 new home sales in January.
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.