The Mortgage
Bankers Association (MBA) reports a drop in applications for the purchase of
newly constructed homes last month. Those applications fell by 3.9 percent
compared to August although they remained 8.2 percent higher than they were the
previous September. The change does not
reflect any seasonal adjustment. The
information comes from MBA's Builder Application Survey (BAS) which is
conducted among the mortgage subsidiaries of new home builders.
Based
on the survey data as well as other marketing data, MBA projects that new home
sales were running at a seasonally adjusted annual rate of 643,000 units.
The seasonally adjusted annual number in August was 669,000. On an unadjusted basis, MBA estimates that
there were 50,000 new home sales in September 2018, a decrease of 5.7 percent
from 53,000 new home sales in August.
"Even though new home
sales decreased 3.9 percent over the month, the average monthly number of homes
sold so far this year (648,000 units) is around 8 percent higher than a year
ago, and last month's 8.2 percent annualized gain in purchase applications
points to continued demand for new homes," said Joel Kan, MBA Associate Vice
President of Economic and Industry Forecasting. "Housing demand is still strong
even as mortgage rates increase, and as a result, we're still forecasting for
modest growth in purchase origination volume in 2018."
Conventional loans
accounted for 71.0 percent of applications and FHA loans for 16.0 percent. VA loans had an 11.9 percent share and 1.1
percent were for RHS/USDA loans. The average loan size for new homes increased
from $332,801 in August to $333,086 in September.
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 September,
issued jointly with the Department of Housing and Urban Development, will be
published on October 24.