New Home Purchase Apps Decline. Blame the School Year?

Applications for the purchase of newly constructedrnhomes fell in May, a decline which the Mortgage Bankers Association (MBA)rnattributed at least in part to seasonal factors.  Data from MBA’s Builder Application Surveyrnshows a decrease of 9 percent in applications during the month when compared tornApril’s numbers.  There is no adjustmentrnfor typical seasonal patterns. </p

By product type, conventional loans composed 67.4rnpercent of loan applications, FHA loans for 19.1 percent, VA loans 12.3 percentrnand RHS/USDA loans 1.2 percent. The average loan size of new homes increasedrnfrom $315,670 in April to $320,744 in May.</p

 “Mortgagernapplications to homebuilders declined in May following an improved start to thernyear. Consistent with the intent to complete new homes in time for the schoolrnyear, applications fell at a similar rate between April and May last year. Thatrnsaid, application volume is 15% percent ahead of the same month last year,” saidrnLynn Fisher, MBA’s Vice President of Research and Economics.</p

Based on application data from its survey and assumptionsrnregarding market coverage and other factors the MBA estimates new single-familyrnhome sales were running at a seasonally adjusted annual rate of 459,000 unitsrnin May 2015.  When seasonally adjustedrnthe May data represents a decrease of 5.7 percent from the April pace ofrn487,000 units. On an unadjusted basis, the MBA estimates that there were 45,000rnnew home sales in May 2015, a decrease of 6.3 percent from 48,000 new homernsales in April.</p

MBA’s Builder Application Survey tracksrnapplication volume from mortgage subsidiaries of home builders across therncountry. Official new home sales estimates are conducted by the Census Bureaurnon a monthly basis. In that data, new home sales are recorded at contractrnsigning, which is typically coincident with the mortgage application.

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