Mortgage Bankers Association Predicts Sharp Increase in New Home Sales

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The Mortgage Bankers Association (MBA) is forecasting
a sizable jump in new home sales
in January. Based on responses to its Builder Application
Survey (BAS), MBA estimates that applications for the purchase of newly
constructed homes rose 18.4 percent compared to those during the previous
January and were up 34 percent from December. The change is not adjusted to
reflect typical seasonal patterns.

Based on the
application volume and other market data, MBA estimates sales during the month
were at a seasonally adjusted annual rate of 700,000 units. This would mark a
gain of 26.4 percent from December’s pace
of 554,000 units. On an unadjusted
basis, the estimated change from December was 35 percent, rising from 40,000 to
54,000 new homes sold.

“Mortgage applications
for new homes surged in January and were up 18 percent on a year over year
basis
,” said Lynn Fisher, MBA Vice President of Research and Economics. “This
complements other positive news on US job growth suggesting that economic
fundamentals are strong. Based on applications, we estimate that new home sales
were running at a pace of 700,000 on a seasonally adjusted annual basis – the
highest such estimate in our survey which began in 2013.”

MBA says 71.7 percent
of loan applications received during the month were for conventional loans and15.3
percent, for FHA products.  RHS/USDA loans
had a 1.2 percent share and VA loans accounted for 11.7 percent. The average
loan size of new homes decreased from $339,203 in December to $338,918 in
January.

MBA’s Builder
Application Survey tracks application volume from mortgage subsidiaries of home
builders across the country. Utilizing this information, as well as data from
other sources, MBA provides an early estimate of new home sales volumes at the
national, state, and metro level as well as counts of the types of loans used
by new home buyers. Official new home sales estimates are provided monthly by
the Census Bureau. It records sales at contract signing, which is typically
coincident with the mortgage application. Census Bureau data on new home sales
in January will be published on February 26.



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