MBA has a More Upbeat View on New Home Sales

Even though the January Census Bureau
report on new home sales published on Thursday wasn’t all that encouraging for
the spring market, the Mortgage Bankers Association (MBA) is predicting more
upbeat news
for February.  The Association’s
Builder Application Survey (BAS) shows a 6 percent increase in new home
purchase applications from the previous month and a 3-point gain from February 2018.  Those numbers are not seasonally adjusted.

MBA estimates new
single-family home sales were running at a seasonally adjusted annual rate of
690,000 units in February 2019, based on its survey data and assumptions
regarding market coverage and other factors. This is down 3.2 percent from the
January pace of 713,000 units. On an unadjusted basis, the estimate is for 59,000
new home sales in February 2019, an increase of 9.3 percent from 54,000 new
home sales in January.

“The housing market remains poised for a strong spring, with last month’s
increase in builder applications likely leading to a healthy 7 percent
year-over-year rise in new home sales
,” said Joel Kan, MBA’s Associate Vice
President of Economic and Industry Forecasting. “We are starting to see signs
of more new residential construction and inventory, which increases buying
opportunities for the many home shoppers who have been hampered by the ongoing
lack of supply.”

Added Kan, “Slowing home-price growth, combined with stronger wage gains and
lower mortgage rates, is translating to improving affordability conditions for
spring buyers
.”

Conventional loans accounted for 69.0 percent of loan applications and FHA
loans garnered 17.9 percent. VA loans had a 12.5 percent share and RHS/USDA
loans got 0.6 percent.  The average loan
size for new home purchases increased from $334,532 in January to $340,692 in
February.

MBA’s Builder Application Survey tracks application volume from mortgage
subsidiaries of home builders across the country. Utilizing this data MBA is
able to provide an early estimate of new home sales volumes and information
regarding the types of loans used by new home buyers. Official new home sales
estimates are conducted 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. February census numbers will be published on
March 29.

Article source: http://www.mortgagenewsdaily.com/03142019_mba_new_home_sales.asp

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