New home purchases decreased 2.1 percent from a year ago, according to the Mortgage Bankers Association Application Survey for October. The performance in September increased 11 percent compared with September 2018. This change does not include any adjustment for typical seasonal patterns.

“While we have seen some monthly swings in new home sales in 2018, the year-to-date average sales pace is around seven percent higher than the same period in 2017,” said Joel Kan, associate vice president of economic and industry forecasting for the MBA. “Additionally, the average loan size for a new home purchase application, at around $332,000, was at its lowest since July 2017. This is potentially a sign that there has been some additional inventory in the new home market, and that the rapid price growth in some geographies is starting to ease.”

MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 673,000 units in October 2018, based on data from the survey. The new home sales estimate is derived using mortgage application information from the survey, as well as assumptions regarding market coverage and other factors.

The seasonally adjusted estimate for October is an increase of 4.7 percent from the September pace of 643,000 units. On an unadjusted basis, the MBA estimates that there were 53,000 new home sales in October 2018, an increase of 6 percent from 50,000 new home sales in September.

By product type, conventional loans composed 70.9 percent of loan applications, FHA loans composed 17.1 percent, RHS/USDA loans composed 0.7 percent and VA loans composed 11.2 percent. The average loan size of new homes decreased from $333,086 in September to $331,732 in October.

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.