WASHINGTON, D.C. (April 14, 2020) — The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for March 2020 shows mortgage applications for new home purchases increased 21.2 percent compared from a year ago. Compared to February 2020, applications increased by 14 percent. This change does not include any adjustment for typical seasonal patterns.
“The strong increase in new home purchase applications was likely because of falling mortgage rates and stronger economic conditions at the start of the month. This boosted activity and offset the coinciding decline once COVID-19-related disruption sapped demand in the following weeks,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “The seasonally adjusted estimate of new home sales decreased almost 7 percent last month. Although that is a notable decline, it is not as steep as what has occurred in MBA’s weekly purchase applications data, which covers both the new and existing home markets. It is expected that new home purchases in April will decrease.”
MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 697,000 units in March 2020, 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 March is a decrease of 6.6 percent from the February pace of 746,000 units. On an unadjusted basis, MBA estimates that there were 71,000 new home sales in March, an increase of 10.9 percent from 64,000 new home sales in February.
By product type, conventional loans composed 68.1 percent of loan applications, FHA loans composed 18.6 percent, RHS/USDA loans composed 1.4 percent and VA loans composed 11.9 percent. The average loan size of new homes increased from $340,169 in February to $344,556 in March.
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.
For additional information on MBA’s Builder Application Survey, please click here.