New homes sales posted a loss in May, erasing the 5 percent gain made in
April. The Mortgage Bankers Association
(MBA) estimated that new single-family home sales were running at a seasonally
adjusted annual rate of 374,000 units in May compared to 419,000 units in
April, a seasonally adjusted decline of 8 percent.
On an unadjusted basis the annual estimate for May
is a decrease of 10.7 percent from that of April. Sales for the month were estimated at 36,000
on an unadjusted basis, a decrease of 14.3 percent from an estimate of 42,000
sales in April.
The MBA bases its estimate of sales on applications for mortgages to
purchase newly constructed homes. Data
is gathered through MBA’s Builder Application Survey conducted among mortgage subsidiaries of home builders across the country.
By product type, conventional loans composed 69.3
percent of loan applications, FHA loans 15.5 percent, VA loans 13.6 percent,
and Rural Housing Service/USDA loans 1.7 percent. The average loan size of new homes decreased
from $299,094 in April to $296,427 in May.
In addition to data from new home builders MBA’s
estimates are derived using assumptions regarding market coverage and other
factors. 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.