The Mortgage Bankers Association (MBA) estimates that sales of newly constructed homes increased by 5.0 percent in August compared to July.  The estimate, which is not seasonally adjusted, is based on applications for new home purchases submitted through mortgage subsidiaries of new home builders as well as assumptions regarding market coverage and other factors.

On a seasonally adjusted basis MBA estimates new single-family home sales were running at a rate of 601,000 units in August, an increase of 11.3 percent from the seasonally adjusted July figure.  On an unadjusted basis the estimate is that 48,000 homes sold, up from 45,000 in July. 

 "Applications for new home purchase mortgages were up in August on an unadjusted basis following a sluggish July," said Lynn Fisher, MBA's Vice President of Research and Economics. "New home purchase applications increased 5 percent over the month and increased more than 14% compared to August a year ago. Based on the applications data, our estimate of seasonally adjusted new home sales for August reached 601,000 sales, the highest level observed in our survey since it began in 2012.

Fisher admitted that MBA's recent estimates of new home sales have trailed the official single family home sales report produced by the U.S. Census Bureau and the Department of Housing and Urban Development (HUD), but said, "The increase in our series in August, which derives from a different source of data compared to the Census, provides some corroboration that single family building activity has remained strong even as the summer winds down. Our sense is that builders have been attempting to catch up with demand in the face of labor shortfalls and other limiting factors in various parts of the country."

The difference between the MBA and official sales estimates in July was substantial.  MBA had predicted an 8.0 percent decline from June to 45,000 units while the unadjusted Census number for the month was 57,000 and the seasonally adjusted estimate rose 12.4 percent to 654,000.

By product type, conventional loans composed 67.7 percent of loan applications in August, and FHA loans 18.4 percent.  VA loans had a 13.2 percent share and 0.7 percent were for RHS/USDA loans.  The average loan size of new homes declined from $325,843 in July to $325,224 in August.

MBA gathers data for its new home sales estimate through its Builder Applications Survey (BAS).  The Census/HUD report on new home sales will be released on September 26.