After last months' disappointing Census Bureau report on September new home sales - down 11.5 percent from a solid August - one might hope for an October rebound.  However information from the Mortgage Bankers Association's Builder Application Survey doesn't offer much encouragement in that regard.

The survey indicates that mortgage applications for new home purchases decreased by 8 percent in October relative to the previous month. This change does not include any adjustment for typical seasonal patterns.

"On top of normal seasonal slowdown, the October decline in mortgage applications to builder affiliates was likely amplified by some applications being pulled forward into September ahead of the implementation of the Know Before You Owe Rule on October 3," said Lynn Fisher, MBA's Vice President of Research and Economics. "Despite the decrease, our estimate of new single-family housing sales for October was up more than 7 percent from a year ago."

Based on the survey data and MBA's assumptions about market coverage and other factors Friday's report estimates that new single family home sales were running at a seasonally adjusted rate of 495,000 units in October. This estimate represents a decrease of 9.7 percent from September's MBA projection of a 548,000 unit pace.  On an unadjusted basis, the MBA estimates that there were 39,000 new home sales in October 2015, a decrease of 7.1 percent from 42,000 new home sales in September. 

Official new home sales estimates are conducted by the Census Bureau on a monthly basis.  For that report new home sales are recorded at contract signing, which is typically coincident with the mortgage application. As a reality check the Census Bureau's figures for September were 468,000 units on a seasonally adjusted basis and 36,000 units unadjusted, way below MBA's estimate for that month.

Conventional loans composed 67.2 percent of October new home loan applications and FHA loans accounted for19.2 percent.  Applications for VA loans composed 12.7 percent, and RHS/USDA loans 1.0 percent.  The average loan size for new homes decreased from $324,884 in September to $320,881 in October.

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 provides an early estimate of new home sales volumes at the national, state, and metro level.