New Home Mortgage Applications Softened in August

News

The Mortgage Bankers Association’s (MBA’s)
measure of new home sales reflected a significant drop in the volume of applications
for mortgages to purchase those homes in August.  Data gathered through MBA’s Builder Applications Survey (BAS) indicates that the
number of applications decreased by 9 percent relative to the volume in
July.  The
measure is not adjusted to account for typical seasonal patterns.

Based on the BAS and assumptions
regarding market coverage and other factors MBA estimates that new single-family
home sales in August were at a seasonally adjusted annual rate of 424,000 units.  This is a change of -2.1 percent from the
estimate for July of 433,000 units.  On a
non-adjusted basis sales in August were estimated to be approximately 34,000,
down from 37,000 units the previous month, a decrease of 8.1 percent.  Estimated August sales were 2.9 percent below
sales in August 2013 of 35,000 units.

MBA’s monthly report breaks down new home purchase applications by product type.  Conventional loans made up 68.9 percent of
loan applications and FHA loans 15.7 percent. 
VA loans were the third largest source at 14.3 percent and 1.0 percent
were RHS/USDA loans.  The average loan
size to purchase new homes increased from $297,253 in July to $300,443 in
August.

MBA’s Builder Application Survey tracks application volume from mortgage
subsidiaries of home builders across the country.  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.  

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