The Mortgage Bankers Association (MBA) projects a decrease in new home sales in November compared to the previous month, but still sees those sales running well ahead of last year. MBA's Builder Applications Survey (BAS), conducted among mortgage subsidiaries of home construction companies, indicates that sales during the month were down 6 percent from October, but were a healthy 12.2 percent higher than in November 2016.
MBA estimates this puts the number of sales during the month at a seasonally adjusted annual rate of 663,000 units compared to 659,000 units in October. On an unadjusted basis, there was an apparent decline month-over-month of 11.3 percent, from 53,000 to 47,000 new homes. The sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.
"New homes sales continued to recover in November from the impact of hurricanes, up just a bit on a seasonally adjusted basis over the month, and nearly 13 percent higher than a year ago, according to our projections from monthly application activity. Looking ahead to 2018, filling open construction jobs will remain a main challenge for the homebuilding industry," said Lynn Fisher, MBA Vice President of Research and Economics.
Applications for conventional purchase loans made up 71.4 percent of those tallied in the BAS. FHA loans composed 15.2 percent, RHS/USDA loans 1.1 percent and VA loans had a 12.3 percent share. The average loan size of new homes decreased from $339,534 in October to $337,427 in November.
MBA uses the survey as well as other data to provide an early estimate of new home sales volumes at the national, state, and metro level as well as 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. The Census Bureau will release November statistics on December 22.