The Mortgage Bankers Association (MBA) says that information collected through its Builder Application Survey (BAS), shows mortgage applications for new home purchases climbed 23 percent on a non-seasonally adjusted basis from September to October. From this MBA estimates that new home sales during the month totaled 53,000 units on an unadjusted basis, compared to 42,000 the previous month. They also estimate a 16.1 percent gain year-over-year.
"October registered the strongest growth rate in applications so far this year, following September's hurricane related decrease," said Lynn Fisher, MBA's Vice President of Research and Economics. "Overall, applications reached near August levels. Texas mirrored the national pattern, and Florida fell just 4 percent short of its August total. The Builder Application Survey does not measure activity in Puerto Rico."
On a seasonally adjusted basis, MBA estimates new single-family home sales were running at an annual rate of 659,000 units. This is an increase of 15.4 percent from the September estimate of 571,000 units. The BAS gathers application information from mortgage company subsidiaries of new home builders. MBA combines that data with assumptions regarding market coverage, and other factors.
By product type, conventional loans composed 71.8 percent of loan applications, FHA loans 15.1 percent, VA Loans 11.7 percent, and RHS/USDA loans 1.4 percent. The average loan size of new homes increased from $334,722 in September to $339,534 in October.
Official new home sales estimates are published monthly by the Census Bureau. In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application. The Census Bureau report for October will be released on November 27.