March ended with more mortgage applications for the purchase of new single-family homes, according to the Mortgage Bankers Association. This accelerated activity represented a 6.7% increase from March 2016, and a 23% increase from February 2017, which does not include seasonal adjustments.
The MBA’s Builder Application Survey (BAS) monitors loan applications directly from single-family home builders. And March’s data represented the highest point since the survey’s inception in August 2012, said Lynn Fisher, VP Research and Economics at MBA in the accompanying press statement.
March’s showing also reflects efforts on the part of developers who came up with new products to mitigate the low supply of for-sale existing homes in the U.S., Ms. Fisher noted. This tight housing inventory will likely persist in April as homeowners hold on to their low mortgage rates or defer from selling their homes, according to Freddie Mac’s recent housing outlook.
By Loan Size, Loan Type
The average loan size for new homes in March remained unchanged from a year ago.
- This contrasts with the increasing loan size trend reflected in MBA’s Weekly Application Survey, a separate survey tracking applications for new and existing homes.
- Per the BAS, almost two-thirds of the total new home purchase mortgage applications have loan sizes ranging from $200,000 to $400,000.
- The average loan size in March was $328,192 from $330,208 tracked in February.
By loan type, the March total mortgage applications consisted of:
- Conventional loans – 67.5%
- FHA loans – 18.6%
- VA loans – 12.8%
- RHS/USDA loans – 1.0%
New Single-Family Home Sales Estimates
The Builder Application Survey estimated the new single-family home sales at 670,000 units on a seasonally adjusted annual rate (SAAR) basis in March.
This seasonally adjusted estimate represented a 14.3% increase from February’s 586,000 single-family home sale units.
The estimate takes into account mortgage application information derived from the BAS, assumptions on market coverage, and other factors.
If not seasonally adjusted, the MBA puts the March new home sales at 62,000 units, which is 21.6% higher than in February.
Justin McHood is a managing partner at Suited Connector and has been recognized by national media outlets as a financial expert for more than a decade.
