MBA Purchase Application Data Suggests Lower New Home Sales

Applications for the purchase of newly construction homes were down again in December, declining 11 percent from November's levels.  November sales had posted an 18 percent decline and October sales were down 11 percent.  The Mortgage Bankers Association (MBA) said there was no adjustment made to its numbers to account for typical seasonal patterns.

Applications for Veterans Administration loans rose from 12.9 percent of the total in November to 16.9 percent in December while applications for conventional loans fell by a similar amount - from 66.2 percent to 63.0.  FHA loans comprised 19.2 percent and Rural Housing/USDA loans 0.9 percent of applications compared to 19.9 percent and 1.2 percent in November.  The average size of a new home loan increased from $295,523 to $300,444.

MBA's data comes from its Builder Application Survey conducted among mortgage subsidiaries of home builders across the country.  This and data from other sources are used to provide an early estimate of new home sales and the financing methods used by their buyers.  Official new home sales information is provided on a monthly basis by the Census Bureau based on purchase contract signings with the next released scheduled for January 27.    

MBS projects that sales of new homes were at a seasonally adjusted rate of 402,000 in December, down from 455,000 units in November.  On an unadjusted basis MBA estimates there were 28,000 new home sales compared to 32,000 a month earlier.  New home sales for the full year 2013 averaged 445,000 homes according to the builder survey, aligning with MBA's 2013 forecast of 449,000 new units.