New Home Sales Estimates Slip -MBA

New homes sales posted a loss in May, erasing the 5 percent gain made inrnApril.  The Mortgage Bankers Associationrn(MBA) estimated that new single-family home sales were running at a seasonallyrnadjusted annual rate of 374,000 units in May compared to 419,000 units inrnApril, a seasonally adjusted decline of 8 percent.   </p

On an unadjusted basis the annual estimate for Mayrnis a decrease of 10.7 percent from that of April.  Sales for the month were estimated at 36,000rnon an unadjusted basis, a decrease of 14.3 percent from an estimate of 42,000rnsales in April.  </p

The MBA bases its estimate of sales on applications for mortgages tornpurchase newly constructed homes.  Datarnis gathered through MBA’s Builder Application Survey conducted among mortgage subsidiaries of home builders across the country.</p

By product type, conventional loans composed 69.3rnpercent of loan applications, FHA loans 15.5 percent, VA loans 13.6 percent,rnand Rural Housing Service/USDA loans 1.7 percent.  The average loan size of new homes decreasedrnfrom $299,094 in April to $296,427 in May.</p

In addition to data from new home builders MBA’srnestimates are derived using assumptions regarding market coverage and otherrnfactors.  Official new home salesrnestimates 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.

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