Applications For New Home Purchases Plummet By 9%

Posted by Patrick Barnard on September 11, 2014 No Comments
Categories : Residential Mortgage

The number of applications for new home purchases went down in August by 9% compared to July, the Mortgage Bankers Association (MBA) reports.

This change does not include any adjustment for typical seasonal patterns. The MBA recently reported that overall mortgage application volume fell a dramatic 7.2%, on an adjusted basis, for the week ending Sept. 5.

According to the MBA's Builder Application Survey (BAS) data for August, conventional loans made up 68.9% of loan applications, Federal Housing Administration loans made up 15.7%, Rural Housing Service/U.S. Department of Agriculture loans made up 1.0%, and Veterans Affairs loans made up 14.3%.

The average loan size of new homes increased from $297,253 in July to $300,443 in August.

The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 424,000 units in August, based on data from the BAS. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.

The seasonally adjusted estimate for August is a decrease of 2.1% from the July pace of 433,000 units. On an unadjusted basis, the MBA estimates there were 34,000 new home sales in August – a decrease of 8.1% from 37,000 new home sales in July. Compared to last year, the MBA estimate of unadjusted new home sales is down 2.9% from 35,000 new home sales in August 2013.

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