MBA Predicts New Home Sales Up in March

The Mortgage Bankers Association (MBA) is predicting a strong increase in new home sales in March.  Its Builder Application Survey (BAS), conducted with mortgage subsidiaries of new home builders, found applications for new home purchase mortgages were up 14 percent from February.  They still lagged those from a year earlier by 2.6 percent. Those numbers do not include any adjustment for typical seasonal patterns.

Using that information as well as other data regarding market coverage, MBA estimates there were 65,000 newly constructed homes sold during the month.  This would be an increase of 18.2 percent from the 55,000 new home sales in February.

The MBA says its data indicates new single-family home sales were running at a seasonally adjusted annual rate of 682,000 units in March 2018.  This is an increase of 7.9 percent from the seasonally adjusted February pace of 632,000 units.

"Applications taken for new home purchases decreased year over year in March. We saw a strong January and February, and that may have pulled some activity forward. We did, however, see the third straight month over month increase, which is in line with the typical seasonal pattern at this time of the year," said Joel Kan, Associate Vice President of Economic and Industry Forecasting. "Our estimate of new home sales for March was 682,000 units, a rebound of almost 8 percent after a February decrease."

When broken down by product type, conventional loans composed 71.2 percent of total applications with 15.4 percent going to FHA loans and 11.9 percent to VA loans.

RHS/USDA loans made up a 1.4 percent share. The average loan size of new homes decreased from $338,078 in February to $337,597 in March.

MBA uses its Builder Application Survey and data from other sources to provide an early estimate of new home sales.  Official new home sales estimates are conducted monthly by the Census Bureau.  In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.  The Census Bureau report for March will be released on April 24.