The Mortgage Bankers Association Builder Application Survey data for December 2018 shows mortgage applications for new home purchases decreased 6.1 percent from a year ago. Compared to November 2018, applications decreased by 13 percent. This change does not include any adjustment for typical seasonal patterns.

“New home sales declined for the second straight month in December, to 552,000 units from 627,000 units, as factors such as a volatile stock market and economic uncertainty, both here and abroad, likely kept some prospective buyers away,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “This pullback in activity was in spite of falling mortgage rates and a robust job market. Looking ahead, if mortgage rates remain low, housing inventory rises, and home-price growth continues to steady, we expect to see a rebound in purchase activity this spring.”

MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 552,000 units in December, based on data from the builder application survey. The new home sales estimate is derived using mortgage application information from the builder application survey, as well as assumptions regarding market coverage and other factors.

The seasonally adjusted estimate for December is a decrease of 12 percent from the November pace of 627,000 units. On an unadjusted basis, MBA estimates that there were 37,000 new home sales in December 2018, a decrease of 17.8 percent from 45,000 new home sales in November.

By product type, conventional loans composed 69.5 percent of loan applications, FHA loans composed 17.3 percent, RHS/USDA loans composed 0.7 percent and VA loans composed 12.5 percent. The average loan size of new homes increased from $326,037 in November to $334,944 in December.

MBA’s Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country. Using 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 every month. In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.

Better Mortgage, a digital mortgage lender, has reported that it has tripled originations in 2018, in the face of higher rates and a slowing real estate market.

[caption id="attachment_9118" align="alignright" width="256"] Vishal Garg[/caption]

Loan originations jumped to $1.34 billion in 2018, compared with $450 million in 2017. Better aims to deliver lower rates, faster closing times, and a transparent, technology-driven mortgage experience. The firm lends in 27 states and Washington, D.C., and its non-commissioned loan officers originate on average more than 40 loans each month, compared to the industry standard of 4.2 loans each month, according to data from the Mortgage Bankers Association. Because loan-officers aren’t paid commissions, the cost of buying a mortgage might be reduced and consumers might be more educated about the origination process.

"Our mission is to change the way Americans buy and refinance their home and we are just getting started," said Vishal Garg, founder and CEO at Better Mortgage. "In a year when the rest of the mortgage industry contracted, we've tripled loan originations by delivering value to consumers by completely re-engineering the mortgage process, by eliminating the traditional commission structure and prioritizing customer service over sales."

Better promises pre-approvals in as little as three-minutes, on-time closings and a Better Price Guarantee.

A $1,000 increase in the cost of a median-priced newly-built home, pushes 127,560 prospective buyers out of the market, notes a survey.

These households would be able to qualify for a mortgage to purchase the home before the price increase, but not afterward, according to a recent study by the National Association of Home Builders.

The numbers are even more startling when looking at the impact of potential interest rate increases. Just a quarter-point rise in the rate for a 30-year fixed-rate mortgage would price out around 1 million households.

“Even a relatively small increase in price or interest rates can dramatically impact housing affordability,” said Chairman Randy Noel, chairman of NAHB, and a custom home builder from LaPlace, La. “Housing affordability is a serious problem right now in communities across the country. Rising interest rates, regulatory barriers, higher building materials costs and labor shortages all add to the cost of a home and are preventing households from achieving the goal of homeownership.”

The number of priced out households varies across both states and metropolitan areas, largely affected by the sizes of local population and the affordability of new homes. The study examines priced out estimates for every state and more than 300 metropolitan areas.

Among all the states, Texas had the largest number of home buyers that would be priced of the market. The $1,000 price increase would push 11,152 households out of the market in Texas, followed by California, 9,897, and Ohio, 7,341.

The metropolitan area with the largest priced out effect, in terms of absolute numbers, is Chicago, Naperville Ind., and Elgin, Wisc., where 4,499 households are squeezed out of the market if prices increase by $1,000.

The Cooksey Team, a Dallas-based retail branch of Mid America Mortgage Inc., has achieved year-over-year growth in volume and profitability for the sixth year running. In 2018, The branch increased overall volume by 27 percent compared with the previous year and increased the number of loan units closed by 28 percent. In addition, the branch decreased its cost to originate by 14 percent, resulting in a 35 percent increase in branch profitability, according to the company.

“At a time when volumes are down and the cost to originate is up, we’ve been able to buck industry trends, and that’s due in large part to Mid America’s commitment to utilizing technology to make our operations more efficient,” said Michael Cooksey, founder of the team. “With the adoption of our eClosing process and top-notch CRM system, as well as utilizing Fannie Mae’s Day 1 Certainty program, Mid America has modernized its operations, and our loan originators are reaping the benefits.”

More than 80 percent of Cooksey Team loan originators increased their production in 2018, with some achieving as much as 100 percent growth compared with 2017. In addition, several loan officers have achieved top-tier status in their respective markets, including Wesley Ryan Grubbs, Brandon Findley and Darren Lovell.

“When you have the proper technology and resources in place, along with support from the executive level down, it is possible to thrive in a down market,” Cooksey said. “LO and branch success has always been a top priority at Mid America, and not only has the firm’s investment in the tools and support paid off tremendously this year, but we expect to see that success continue into 2019 as we look to bring on more top-tier talent.”