Applications for mortgages for new home purchases increased 23% in March compared with February and increased 6.7% compared with March 2016, according to the Mortgage Bankers Association’s (MBA) Builder Application Survey (BAS).
This change does not include any adjustment for typical seasonal patterns.
“Mortgage applications for new homes accelerated in March, with the Builder Application Survey Index reaching its highest point since the series began in August 2012,” says Lynn Fisher, vice president of research and economics for the MBA, in a release. “The pick up from a fairly modest February showing suggests that developers are finding ways to bring new product on line to help supplement otherwise low inventories of existing homes for sale in the U.S.
“In contrast to the increasing trend in average loan size in our Weekly Application Survey, which reports on applications for both new and existing homes, the average loan size for new homes in March from the Builder survey was unchanged from a year ago,” Fisher adds. “Looking at the full distribution of applications, nearly two-thirds of applications for new homes in our survey have loan sizes between $200,000 and $400,000.”
Conventional loans composed 67.5% of applications for mortgage for new homes. Federal Housing Administration loans composed 18.6%, Rural Housing Service/U.S. Department of Agriculture loans composed 1.0% and Veterans Affairs loans composed 12.8%.
The average loan size for a new home in March was $328,192, down from $330,208 in February.
The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 670,000 units in March, based on data from the BAS. That’s an increase of 14.3% compared with about 586,000 units in February.
On an unadjusted basis, the MBA estimates that there were 62,000 new home sales in March, an increase of 21.6% compared with 51,000 new home sales in February.
According to estimates released by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development in late March, new home sales in February were at a seasonally adjusted annual rate of about 592,000, an increase of 6.1% compared with about 558,000 in January and an increase of 12.8% compared with 525,000 in February 2016,
It was the fifth consecutive month that new home sales increased on a month-over-month basis.