20 Percent Surge in Q1 New Home Purchase Apps

Sales of new homes appeared to have surged in March.  According to the Mortgage Bankers Association (MBA) mortgage applications for new home purchases were up 17 percent from February.  The data is not seasonally adjusted. 

Lynn Fisher, MBA's Vice President of Research and Economics said, "Overall, applications for new home purchases during the first quarter of 2015 increased 20 percent relative to the first quarter of last year. Continued strength in builder applications raises the likelihood that housing starts will be strong over the next few months. Although the March employment report showed a smaller net gain in jobs, job openings are up, wages are beginning to increase more robustly, and mortgage rates remain low, all of which contribute to stronger housing markets."

New single-family homes were estimated to be selling at a seasonally adjusted annual rate of 510,000 units in March, an increase of 4.7 percent from February's estimate of 487,000 units.  On an unadjusted basis MBA estimates there were 49,000 new homes sold, up 16.7 percent from the 42,000 sold in February.

MBA collects new home sales data from its Builder Application Survey which is conducted with representatives of mortgage subsidiaries of home builders across the country. This data is augmented with assumptions regarding market coverage and other factors.

Conventional loans accounted for 66.0 percent of the new home purchase applications and FHA loans 20.2 percent.  The VA loan share was 12.5 percent and 1.3 percent of applications were for RHS/USDA loans   The average loan size to purchase a new home increased from $311,379 in February to $314,394 in March.

Official new home sales estimates are provided 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.