According to the latest Mortgage Bankers Association Builder Applications Survey for November 2017, U.S. mortgage applications for new home purchases increased 12.2 percent compared to November 2016. Compared to October 2017, applications decreased by 6 percent relative to the previous month. This change does not include any adjustment for typical seasonal patterns.
"New homes sales continued to recover in November from the impact of hurricanes, up just a bit on a seasonally adjusted basis over the month, and nearly 13 percent higher than a year ago, according to our projections from monthly application activity. Looking ahead to 2018, filling open construction jobs will remain a main challenge for the homebuilding industry," said Lynn Fisher, MBA Vice President of Research and Economics.
The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 663,000 units in November 2017, 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 November is an increase of 0.6 percent from the October pace of 659,000 units. On an unadjusted basis, the MBA estimates that there were 47,000 new home sales in November 2017, a decrease of 11.3 percent from 53,000 new home sales in October.
By product type, conventional loans composed 71.4 percent of loan applications, FHA loans composed 15.2 percent, RHS/USDA loans composed 1.1 percent and VA loans composed 12.3 percent. The average loan size of new homes decreased from $339,534 in October to $337,427 in November.
MBA's Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country. Utilizing this data, as well as data from other sources, MBA is able to provide an early estimate of new home sales volumes at the national, state, and metro level. This data also provides information regarding the types of loans used by new home buyers. 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.