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.