According to the Mortgage Bankers Association’s latest Builder Application Survey for September 2018, U.S. mortgage applications for new home purchases increased 8.2 percent compared to September 2017. Compared to August 2018, applications decreased by 9 percent. This change does not include any adjustment for typical seasonal patterns.
“Even though new home sales decreased 3.9 percent over the month, the average monthly number of homes sold so far this year (648,000 units) is around 8 percent higher than a year ago, and last month’s 8.2 percent annualized gain in purchase applications points to continued demand for new homes,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Housing demand is still strong even as mortgage rates increase, and as a result, we’re still forecasting for modest growth in purchase origination volume in 2018.”
MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 643,000 units in September 2018, based on data from the BAS. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.
The seasonally adjusted estimate for September is a decrease of 3.9 percent from the August pace of 669,000 units. On an unadjusted basis, MBA estimates that there were 50,000 new home sales in September 2018, a decrease of 5.7 percent from 53,000 new home sales in August.
By product type, conventional loans composed 71.0 percent of loan applications, FHA loans composed 16.0 percent, RHS/USDA loans composed 1.1 percent and VA loans composed 11.9 percent. The average loan size for new homes increased from $332,801 in August to $333,086 in September.
Source: World Property Journal