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20 Percent Surge in Q1 New Home Purchase Apps
Sales of new homes appeared to have surged in March. According to the Mortgage Bankers Associationrn(MBA) mortgage applications for new home purchases were up 17 percent fromrnFebruary. The data is not seasonallyrnadjusted. </p
LynnrnFisher, MBA’s Vice President of Research and Economics said, “Overall, applications forrnnew home purchases during the first quarter of 2015 increased 20 percent</brelative to the first quarter of last year. Continued strength in builderrnapplications raises the likelihood that housing starts will be strong over thernnext few months. Although the March employment report showed a smaller net gainrnin jobs, job openings are up, wages are beginning to increase more robustly,rnand mortgage rates remain low, all of which contribute to stronger housingrnmarkets.”</p
New single-family homes werernestimated to be selling at a seasonally adjusted annual rate of 510,000 unitsrnin March, an increase of 4.7 percent from February’s estimate of 487,000rnunits. On an unadjusted basis MBArnestimates there were 49,000 new homes sold, up 16.7 percent from the 42,000rnsold in February.</p
MBA collects new home salesrndata from its Builder Application Survey which is conducted withrnrepresentatives of mortgage subsidiaries of home builders across the country.rnThis data is augmented with assumptions regarding market coverage and otherrnfactors.</p
Conventional loansrnaccounted for 66.0 percent of the new home purchase applications and FHA loansrn20.2 percent. The VA loan share was 12.5rnpercent and 1.3 percent of applications were for RHS/USDA loans The average loan size to purchase a new homernincreased from $311,379 in February to $314,394 in March.</p
Official new home salesrnestimates are provided by the Census Bureau on a monthly basis. In that data,rnnew home sales are recorded at contract signing, which is typically coincidentrnwith the mortgage application.
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Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.
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