Applications for new home purchases jumped 15.6
percent in April compared to a year ago and were 3.0 percent higher than in
March. The Mortgage Bankers Association said
these non-seasonally adjusted numbers indicate there will be a strong increase
in new home sales for the month.
"There
was a healthy increase in new home purchase activity in April, boosted by the
strong economic and employment conditions seen in the first quarter of 2019,"
said Joel Kan, MBA's Associate Vice President of Economic and Industry
Forecasting. "Applications for new home purchases increased, as did our
estimate for new home sales. After two months of declines, MBA estimates that
April new home sales were 10 percent higher than last April and reached the
highest annual pace since this survey's inception in 2013."
Based on MBA mortgage application information from the MBS's
Builder Application Survey (BAS,) as well as assumptions regarding market
coverage and other factors, MBA predicts new home sales they will be
up by 6.2 percent from the seasonally adjusted annual rate of 676,000 in March
to 722,000 units. On an unadjusted
basis, MBA estimates that there were 69,000 new home sales in April 2019, an
increase of 4.5 percent from 66,000 new home sales in March.
Conventional
loans accounted for 70.7 percent of loan applications, and FHA loans for 17.1
percent Applications for VA loans had an 11.5 percent share of the total and RHS/USDA
loans 0.6 percent. The average loan size of new homes increased from $331,794
in March to $338,745 in April.
MBA's Builder Application
Survey tracks application volume from mortgage subsidiaries of home builders
across the country. Utilizing this data, as well as data from other sources,
MBA is able to provide an early estimate of new home sales volumes at the
national, state, and metro level. 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. The Census Bureau
report for April will be released on May 23.