The Mortgage Bankers Association's (MBA's) most recent regular report on mortgage application volume released on Wednesday indicated a sudden pick-up in purchase mortgage applications last week.  Today's monthly new homes report from the Association adds further to that news.  

MBA's data, gathered through its Builder Application Survey (BAS) shows that applications for mortgages to purchase newly constructed homes jumped by 17 percent in March compared to the previous month.  The report does not include any adjustment for seasonal patterns.

Lynn Fisher, MBA's Vice President of Research and Economics, said, "Rising prices for existing homes and a strong job market are making the math work for new construction. In March, the Builder Application Index reached its highest level since its inception in 2012 and was more than 18 percent higher than one year ago. During the last three years, peak application activity for new homes has taken place in March and April suggesting the trend should continue next month."  

MBA's estimates are based on responses to the BAS which is conducted among mortgage subsidiaries of home builders across the country as well as data from other sources. Official new home sales estimates are conducted 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.  That data for March will be released on April 25.

The survey also collects information on the types of loans for which applications were submitted.  In March conventional loans composed 67.5 percent of the total, FHA loans 18.7 percent, VA loans 13.0 percent and RHS/USDA loans 0.7 percent. The average loan size of new homes increased from $328,370 in February to $339,296 in March.

Based on BAS data, assumptions regarding market coverage, and other factors, MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 574,000 units in March 2016.

The seasonally adjusted estimate for March is an increase of 5.5 percent from the February pace of 544,000 units. On an unadjusted basis, the MBA estimates that there were 54,000 new home sales in March 2016, an increase of 14.9 percent from 47,000 new home sales in February.