The January spurt in applications for new home purchases does not surprise Mike Fratantoni, chief economists for the Mortgage Bankers Association.  Fratantoni said that, while the 35 percent increase from December "May appear to conflict with other data such as MBA's purchase application index and NAR's existing home sales data that point to a weak market for existing homes, our Builder Application Survey (BAS) estimate is consistent with reports of homebuilder sentiment that show strength in the market for new homes.  It is also worth noting that the significant January increase also followed a particularly slow pace of sales in November and December."

MBA estimates that new homes sold at a seasonally adjusted annual rate of 543,000 units in January compared to 402,000 units in December.  On an unadjusted basis, there were an estimated 38,000 new homes sold during the month, up 36 percent from an estimate of 28,000 units in December 2013.  MBA derives its figures using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.

On an unadjusted basis MBA says that mortgage applications for new home purchases increased by 27 percent relative to the previous month.  By product type, conventional loans composed 69.4 percent of loan applications and FHA loans 15.9 percent.  Rural Housing Service/U.S. Department of Agriculture (RHS/USDA) loans made up 1.3 percent of the total and VA loans 13.4 percent.  The average size of new home loans decreased from $300,444 in December to $289,358 in January.

MBA's Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country.  Official new home sales estimates are published by the Census Bureau on a monthly basis.  In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.