WASHINGTON, D.C. (October 18, 2022) – The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for September 2022 shows mortgage applications for new home purchases decreased 13.2 percent compared from a year ago. Compared to August 2022, applications decreased by 7 percent. This change does not include any adjustment for typical seasonal patterns.
MBA estimates new single-family home sales, which has consistently been a leading indicator of the U.S. Census Bureau’s New Residential Sales report, is that new single-family home sales were running at a seasonally adjusted annual rate of 637,000 units in September 2022, 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.
“New home purchase activity declined in September as prospective homebuyers pulled back in response to higher mortgage rates, increased concern about an impeding recession, and a broader slowdown in home-price growth,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The average 30-year fixed mortgage rate increased almost a full percentage point in the last month, greatly reducing the purchasing power of many home shoppers. MBA’s estimate of new home sales declined 9 percent in September, partially reversing the 18 percent increase in August during that brief period when mortgage rates decreased.”
Added Kan, “The average loan size measured in the survey fell for the fifth consecutive month – after reaching a survey high in April 2022 – to $406,767.”
The seasonally adjusted estimate for September is a decrease of 8.9 percent from the August pace of 699,000 units. On an unadjusted basis, MBA estimates that there were 52,000 new home sales in September 2022, a decrease of 10.3 percent from 58,000 new home sales in August.
By product type, conventional loans composed 69.8 percent of loan applications, FHA loans composed 18.7 percent, RHS/USDA loans composed 0.3 percent and VA loans composed 11.2 percent. The average loan size of new homes decreased from $415,594 in August to $406,767 in September.
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.