Based on the Mortgage Bankers Association's newly released Builder Application Survey for March 2019, U.S. mortgage applications for new home purchases increased 7 percent compared to a year ago. Compared to February 2019, applications increased by 19 percent. This change does not include any adjustment for typical seasonal patterns.
"With a strong job market, rising wages and lower mortgage rates, housing demand remains strong, as shown by the solid 7 percent growth in new home purchase applications in March," said Mike Fratantoni, MBA Senior Vice President and Chief Economist. "The confluence of declining mortgage rates with the spring buying season is supporting stronger housing demand and activity. Additionally, the drop in average loan size suggests that builders are tilting production to lower-priced homes, which continues to see the tightest inventories and strongest home-price growth."
MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 676,000 units in March 2019, 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 March is a decrease of 2 percent from the February pace of 690,000 units. On an unadjusted basis, MBA estimates that there were 66,000 new home sales in March 2019, an increase of 11.9 percent from 59,000 new home sales in February.
By product type, conventional loans composed 68.7 percent of loan applications, FHA loans composed 18.8 percent, RHS/USDA loans composed 0.5 percent and VA loans composed 12 percent. The average loan size of new homes decreased from $340,692 in February to $331,794 in March.
According to HUD, the U.S. national vacancy rate in the first quarter 2019 was 7.0 percent for rental housing and 1.4 percent for homeowner housing. The rental vacancy rate of 7.0 percent was virtually unchanged from the rate in the first quarter 2018.
According to a report from the U.S. Housing and Urban Development and Commerce Department, total housing starts fell 0.3 percent in March 2019 to a seasonally adjusted annual rate of 1.14 million units from a downwardly revised reading in February 2019.
According to Freddie Mac's latest Primary Mortgage Market Survey, U.S. mortgage rates rose modestly this 2nd week of April 2019, with the 30-year fixed-rate averaging 4.12 percent. Rates moved up slightly this week while mortgage applications decreased following last week's jump in rates.
A total of 161,875 U.S. properties with a foreclosure filing during the first quarter of 2019, down 23 percent from the previous quarter and down 15 percent from a year ago to the lowest level since Q1 2008.
Join 34,000+ real estate professionals worldwide who receive our free weekly newsletter