MBA Sees Wintertime Volatility in Builder Survey

New home sales were up slightly in February the Mortgage Bankers Association (MBA) said today, but the increase was based on a substantially downgraded January estimate.  MBA issues their estimate of new home sales, which is based on mortgage applications, in advance of the official count by the U.S. Census Bureau.

Sales of new homes were at a seasonally adjusted annual rate of 533,000 units in February, 1 percent above the revised January rate of 527,000.  January's sales were originally estimated at a rate of 543,000 which represented a 35 percent surge from an unusually low sales rate of 402,000 in December.  On an unadjusted basis MBA said there were 43,000 new homes sold during the month, a 13 percent bump from January's 38,000 sales.

Mortgage applications for new home purchases increased by 12 percent relative to January; a change that does not include any adjustment for typical seasonal patterns.  Conventional loans composed 65.1 percent of loan applications, FHA 16.5 percent, VA loans 13 percent, and Rural Housing Services/USDA loans 5.3 percent.   The average loan size of new homes increased from $289,358 in January to $295,008 in February.

MBA derives its estimates from its Builder Application Survey which tracks mortgage application volume from mortgage subsidiaries of home builders across the country and from assumptions regarding market coverage and other factors.  The Census Bureau's report on new home sales, data that is recorded at contract signing which is typically coincident with the mortgage application, will be released on March 25.