New Home Sales Soar, Prices Stabilize -MBA

The Mortgage Bankers Association (MBA) says it appears that new home sales were exceptional strong in March.  Its Builder Application Survey (BAS) shows purchase mortgage applications for newly constructed single-family homes increased by 21.6 percent, on a non-seasonally adjusted basis, from February and were 6.7 percent higher than the previous March.  The unadjusted data indicates there were 62,000 homes sold during the month compared to 51,000 in February. On a seasonally adjusted annual basis MBA puts March sales at 670,000, a 14.3 percent gain from the prior month's rate of 586,000 units. 

"Mortgage applications for new homes accelerated in March, with the Builder Application Survey Index reaching its highest point since the series began in August 2012," said Lynn Fisher, MBA's Vice President of Research and Economics. "The pick up from a fairly modest February showing suggests that developers are finding ways to bring new product on line to help supplement otherwise low inventories of existing homes for sale in the US. In contrast to the increasing trend in average loan size in our Weekly Application Survey which reports on applications for both new and existing homes, the average loan size for new homes in March from the Builder survey was unchanged from a year ago. Looking at the full distribution of applications, nearly two-thirds of applications for new homes in our survey have loan sizes between $200,000 and $400,000."

The BAS is conducted among mortgage subsidiaries of home builders nationwide.  MBA combines this information with assumptions regarding market coverage and other factors.  The official report on new home sales is provided by the U.S. Census Bureau and the Department of Housing and Urban Development.  In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application. The March report will be published on April 25.

By product type, conventional loans composed 67.5 percent of loan applications, FHA loans had an 18.6 percent share, VA 12.8 percent and RHS/USDA loans 1.0 percent.  The average loan size of new homes decreased from $330,208 in February to $328,192 in March.