Applications Hint at Strong June New Home Sales

Applications for mortgages to purchase newly constructedrnhomes rose again in June and the Mortgage Bankers Association (MBA) said thisrnbodes well for a substantial increase in the sales themselves.  </p

MBA’s Builder Application Survey (BAS), conducted among mortgagernsubsidiaries of home builders, increased by 1 percent from May, a number thatrnis not seasonally adjusted.  From thatrndata, as well as assumptions regarding marketrncoverage and other factors, MBA estimates that new single-family homernsales were at a seasonally adjusted annual rate of 496,000 units during thernmonth. This is an increase of 8.1 percent from the MBArnMay estimate of 459,000 units. On an unadjusted basis, the MBA estimates thatrnthere were 45,000 new home sales in June 2015, unchanged from May.  </p

 “As housernprices continue to recover, mortgage applications for the purchase of newlyrnconstructed homes increased slightly in June. Application activity in June wasrnslightly higher compared to the past two years, leading us to estimate that newrnhomes sales increased 8 percent from May on a seasonally adjusted annualrnbasis,” said Lynn Fisher, MBA’s Vice President of Research and Economics.</p

Conventional loans received 67.2 percent of loanrnapplications, FHA loans 9.6 percent, VA loans 12.2 percent, and RHS/USDA loans 1.0rnpercent.  The average loan size of newrnhomes increased from $320,744 in May to $321,678 in June.</p

The MBA uses application volume information fromrnthe BAS as well as data from other sources to provide an early estimate of newrnhome sales volumes at the national, state, and metro level. Official new homernsales estimates are conducted by the Census Bureau on a monthly basis. In thatrndata, new home sales are recorded at contract signing, which is typicallyrncoincident with the mortgage application. June new home sales numbersrnwill be issued by the Bureau on July 24.

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