September New Home Sales Flat According to Applications Data

Applications for mortgages with which tornpurchase new homes in September were essential unchanged in volume from August thernMortgage Bankers Association (MBA) said on Thursday.  The information, from the MBA, BuilderrnApplication Survey (BAS), was extrapolated to indicate that new single-familyrnhome sales were running at a seasonally adjusted annual rate of 425,000 unitsrnin September.  This was up 0.2 percent fromrnthe August estimate of 424,000 units.  </p

Unadjusted data from the survey showed arnmuch larger shift and in the opposite direction.  MBA estimated a total of 32,000 new homesrnsold during the month which was 5.9 percent below the estimate of 34,000 newrnhomes sold in August.</p

The BAS tracks application volume asrnreported by mortgage subsidiaries of home builders nationwide.  MBA uses this data and data from otherrnsources to provide an early estimate of new home sales and the types of loansrnused by their buyers.  Official new homernsales estimates are provided by the Census Bureau and the Department of Housingrnand Urban Development from data recorded at purchase contract signing which MBArnsays is typically coincident with the mortgage application.</p

Last month, based on a 9 percentrndecrease in new home purchase applications, MBA had projected August new homernsales at a seasonally adjusted annual rate of 424,000, a decrease of 2.1rnpercent from July.  The Census Bureaurnreport for the month, issued two weeks later, indicated an unexpected surge inrnsales of 18 percent for the month to a seasonally adjusted annual rate ofrn504,000 units.  </p

Mike Fratantoni, MBA’s chief economist,rnaddressed that discrepancy in today’s press release.  “Through our Builder Application Survey, MBA has been providing thernmarket with an early read on new home sales activity for over a year now. rnOur data has been tracking that of the Census Bureau closely, with a fewrnexceptions.  Earlier this summer, and again last month, the firstrnestimates from Census were significantly higher than the estimates implied fromrnthe applications data.  However, the revised data from Census resulted inrna much closer match to MBA’s estimates, and we anticipate that will be the caserngoing forward, given the high rate of coverage in our survey.” </p

MBA said that 67.6 percent of the loan applications in Septemberrnwere for conventional loans and FHA loans composed 16.7 percent.  VA loans had a 14.5 percent share and 1.2rnpercent were loans from USDA’s Rural Housing Service. The average loan sizerndecreased from $300,443 in August to $298,274 in September.

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