Mortgage applications for new home purchases rose 6.7% in comparison to March of 2016 according to the recently released Builder Application Survey (BAS) for March 2017. Compared to February of this year, mortgage applications soared by 23% relative to the previous month. These changes do not include any adjustments for usual seasonal patterns.
Based on data from the BAS, the Mortgage Bankers Association (MBA), which conducts the survey, estimates new single-family home sales hit a seasonally adjusted annual rate of 670,000 units in March 2017. The seasonally adjusted estimate for March marks an increase of 14.3% from February’s pace of 586,000 units. On an unadjusted basis, the MBA estimates that there were 62,000 new home sales in March 2017, an upsurge of 21.6% from 51,000 new home sales in February.
“Mortgage applications for new homes accelerated in March, with the Builder Application Survey Index reaching its highest point since the series began in August 2012,” commented MBA’s Vice President of Research and Economics Lynn Fisher. “The pick up from a fairly modest February showing suggests that developers are finding ways to bring new product on line to help supplement otherwise low inventories of existing homes for sale in the US. Fisher added, “nearly two-thirds of mortgage applications for new homes in our survey have loan sizes between $200,000 and $400,000.”
Breakdown of loan type:
- Conventional loans: 67.5% of loan applications
- FHA loans: 18.6%
- VA loans: 12.8%
- RHS/USDA: loans 1.0%
The average loan size of new homes dipped slightly, decreasing to $328,192 in March from $330,208 in February.