According to the Mortgage Bankers Association's latest Builder Application Survey data for May 2017, mortgage applications for new home purchases increased 15 percent compared to May 2016. Compared to April 2017, applications increased by 4 percent relative to the previous month. This change does not include any adjustment for typical seasonal patterns.
"Following a decline in April, applications for new homes slightly rebounded month-over-month in May, setting up a 15 percent year over year increase relative to May of 2016," said Lynn Fisher, MBA's Vice President of Research and Economics. "While March has signaled the peak in applications for new homes for the last two years, we may see more sustained activity throughout the balance of this year as demand for new homes continues to increase and strong house price growth continues to motivate homebuilding."
By product type, conventional loans composed 69.2 percent of loan applications, FHA loans composed 17.5 percent, RHS/USDA loans composed 1.1 percent and VA loans composed 12.2 percent. The average loan size of new homes decreased from a revised $329,244 in April to $324,844 in May.
The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 605,000 units in May 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 May is an increase of 8.6 percent from the revised April pace of 557,000 units. On an unadjusted basis, the MBA estimates that there were 57,000 new home sales in May 2017, an increase of 5.6 percent from the revised pace of 54,000 new home sales in April.