Purchase Applications Suggest Rising New Home Sales

Applications for mortgages to purchase newly constructionrnhomes increased by 29 percent in January. rnThe Mortgage Bankers Association (MBA) said that based on this volume,rnwhich is not seasonally adjusted, it estimates that new home sales were runningrnat a seasonally adjusted annual rate of 530,000 units.</p

The unofficial estimate of home sales is generated by MBA from thernapplication data it receives from a survey of the mortgage subsidiaries of homernbuilders throughout the country as well as assumptions regarding marketrncoverage and other factors.  Official new home sales estimates are conducted by thernCensus Bureau on a monthly basis. In that data, new home sales are recorded atrncontract signing, which is typically coincident with the mortgage application.</p

The annual pace new home sales in January is 29.6 percentrnhigher than that in December, an estimated 409,000 units.  On an unadjusted basis MBA estimates thatrn39,000 new homes sold in January, up 39.3 percent from 28,000 new homes sales inrnDecember.  </p

 “On thernstrength of an improving labor market and low interest rates, January new homernsales were up nearly 30 percent from December, ” said Lynn Fisher, MBA’s VicernPresident of Research and Economics. “Relative to a year ago, new home salesrnwere up 2.6 percent on an unadjusted basis.”</p

By product type, conventional loans composed 67.2rnpercent of loan applications, FHA loans composed 18.2 percent, VA loans 13.4rnpercent and RHS/USDA loans 1.1 percent.  Thernaverage loan size of new homes decreased from $311,398 in December to $304,364rnin January.

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