While we have not yet seen figures from the Census Bureau for December let alone January, the Mortgage Bankers Association (MBA) is reporting a surge in new home sales last month. Information from MBA's Builder Application Survey (BAS) indicates that those sales, while unchanged from January 2018, increased by 43 percent compared to December 2018. The change does not include any adjustment for typical seasonal patterns.
On a seasonally adjusted basis, MBA estimates sales were at an annual rate of 713,000 units. This is an increase of 29.2 percent from the December estimate of 552,000 units. Before adjustment MBA estimates that there were 54,000 new home sales in January 2019, up 45.9 percent from 37,000 new home sales in December.
Joel Kan, MBA's Associate Vice President of Economic
and Industry Forecasting said, "After two lackluster months, new home
sales surged almost 30 percent in January to the fastest pace since our survey
began in 2013. The healthy job market,
faster wage growth, moderating price gains and lower mortgage rates all
helped home sales recover. Additionally, builders seem to be seeing improvement
in their labor shortages, as government survey data showed increases in
construction hiring and openings in December."
Conventional loan applications accounted for 68.7 percent of the total and FHA loans for 18.6 percent. RHS/USDA loans had an 0.5 percent share and VA loans composed 12.2 percent. The average loan size of new homes decreased from $334,944 in December to $334,532 in January.
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. This data also provides information regarding the types of loans used by new home buyers. 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. Census Bureau reporting was disrupted by the partial government shutdown. The December data are scheduled for release on March 5.