Even though the January Census Bureau report on new home sales published on Thursday wasn't all that encouraging for the spring market, the Mortgage Bankers Association (MBA) is predicting more upbeat news for February. The Association's Builder Application Survey (BAS) shows a 6 percent increase in new home purchase applications from the previous month and a 3-point gain from February 2018. Those numbers are not seasonally adjusted.
MBA estimates new
single-family home sales were running at a seasonally adjusted annual rate of
690,000 units in February 2019, based on its survey data and assumptions
regarding market coverage and other factors. This is down 3.2 percent from the
January pace of 713,000 units. On an unadjusted basis, the estimate is for 59,000
new home sales in February 2019, an increase of 9.3 percent from 54,000 new
home sales in January.
"The housing market remains poised for a strong spring, with last month's increase in builder applications likely leading to a healthy 7 percent year-over-year rise in new home sales," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "We are starting to see signs of more new residential construction and inventory, which increases buying opportunities for the many home shoppers who have been hampered by the ongoing lack of supply."
Added Kan, "Slowing home-price growth, combined with stronger wage gains and lower mortgage rates, is translating to improving affordability conditions for spring buyers."
Conventional loans accounted for 69.0 percent of loan applications and FHA loans garnered 17.9 percent. VA loans had a 12.5 percent share and RHS/USDA loans got 0.6 percent. The average loan size for new home purchases increased from $334,532 in January to $340,692 in February.
MBA's Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country. Utilizing this data MBA is able to provide an early estimate of new home sales volumes and 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. February census numbers will be published on March 29.