The Mortgage Bankers Association (MBA) added
a little more evidence to the pile indicating a rather rapid slow-down in the
housing market. MBA’s Builder
Application Survey (BAS) data for November shows mortgage applications for
newly constructed home purchases falling by 14 percent compared to
October. The MBA data is not adjusted to
account for seasonal variations, and while sales nearly always decline this
time of year, applications were also down 11 percent compared to November 2017.
Based on the survey data and assumptions about
market coverage and other factors, MBA estimates new home
sales were running at a seasonally adjusted annual rate of 627,000 units in
November. This is down 6.8 percent from the October estimate of 673,000 units.
On an unadjusted basis the
estimate is for 45,000 new single-family sales during the month, a 15.1 percent
decrease from 53,000 sales in October.
“By our estimates, new home sales fell almost 7 percent in November, and were
about 5 percent lower than a year ago,” said Joel Kan, MBA’s Associate Vice
President of Economic and Industry Forecasting. “Despite a still-strong job
market and recent declines in mortgage rates, affordability challenges continue
to hold back sales activity, as wage growth still lags behind home-price
growth. Additionally, recent stock market volatility and some economic
uncertainty likely also contributed to the pullback in home sales in November.”
MBA estimates that 69.7 percent of the purchase mortgage applications were for conventional
loans and 17.3 percent went to FHA. Applications for VA loans accounted for 12.3 percent and RHS/USDA loans for 0.7 percent. The average loan
size decreased from $331,732 in October to $326,037 in November.
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, sales are recorded at contract signing, which is typically coincident
with the mortgage application. November new
home sales data will be reported on Thursday, December 27.