May New Home Purchase Mortgage Applications Decreased 0.5 Percent Year over Year

May New Home Purchase Mortgage Applications Decreased 0.5 Percent Year over Year

WASHINGTON, D.C. (June 14, 2018) – (RealEstateRama) — The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for May 2018 shows mortgage applications for new home purchases decreased 0.5 percent compared to May 2017. Compared to April 2018, applications decreased by 4 percent.This change does not include any adjustment for typical seasonal patterns.

“Despite strong demand, builders have not been able to ramp up the supply of new homes, as they face rising costs from key inputs such as lumber and having to raise wages to fill open positions,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Additionally, our estimate of new home sales declined in May, reaching its lowest level since December 2017.”

MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 626,000 units in May 2018, 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 May is a decrease of 4.6 percent from the April pace of 656,000 units. On an unadjusted basis, MBA estimates that there were 60,000 new home sales in May 2018, a decrease of 4.8 percent from 63,000 new home sales in April. Also on an unadjusted basis, new home sales were more than 5 percent higher than one year ago.

By product type, conventional loans composed 71.1 percent of loan applications, FHA loans composed 15.8 percent, RHS/USDA loans composed 1.0 percent and VA loans composed 12.1 percent. The average loan size of new homes increased from $336,870 in April to $337,515 in May.

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 Applications Survey, please click here.

CONTACT
Ali Ahmad

(202) 557- 2727

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The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation’s residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,400 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field.

Contact:

Mortgage Bankers Association
1331 L Street, NW
Washington, DC 20005

Phone: (202) 557-2700

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